Spousal Lifetime Access Trusts: Income, Gift, Estate, and GST Tax; State Limitations; Building in Powers and Options

Recording of a 90-minute CLE/CPE video webinar with Q&A

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Conducted on Wednesday, May 4, 2022

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Course Materials

This CLE/CPE course will guide trusts and estates counsel on leveraging spousal lifetime access trusts (SLATs) in estate planning in light of the current and ever-changing tax law. The panel will discuss critical issues concerning income, gift, estate, and GST taxes, including pitfalls to avoid. The webinar will explore SLAT basics, discuss how to design SLATs to incorporate flexibility to anticipate an ever-changing landscape as well as review the best way to minimize tax liability and ensure multi-generational gifting and flexible long-term planning.

Description

The current estate tax exemption is scheduled to sunset to pre-2017 levels at the end of 2025, creating uncertainty and challenges in designing estate plans. SLATs can capitalize on current federal and state estate exemption levels in case there is a shift in the current tax regime.

A SLAT is an irrevocable trust created by one spouse for the other's benefit by using the gift tax exemption to make a gift to the SLAT, naming the other spouse as the current beneficiary. Children and grandchildren may also be named as trust beneficiaries during the spouse’s lifetime, but will certainly benefit after the beneficiary spouse's death. This allows limited access to the beneficiary spouse to the SLAT assets and offers flexibility for the family.

Trusts and estates counsel must have a clear understanding of critical tax issues that may arise. The estate and gift tax exemption of $12,060,000 per individual allows SLATs to be a useful lifetime tax savings tool when structured correctly. It can apply to various liquid and illiquid assets, allowing them to flow to the next generation outside of the estate tax regime.

Listen as our panel discusses critical issues and pitfalls to avoid with income, gift, estate, and GST taxes when using SLATs. The panel will explore SLAT basics, discuss how to design SLATs to incorporate flexibility to anticipate an ever-changing landscape as well as review the best way to minimize tax liability and ensure multi-generational gifting and flexible long-term planning.

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Outline

  1. Considerations for the use of SLATs in estate planning
    1. Access to trust assets
    2. Choice of trustee
    3. Impact of joint property
    4. Building in substitution powers and flexibility
  2. Critical tax considerations under the current tax regime
    1. Dual trusts (reciprocal trust doctrine)
    2. SLATs as grantor trusts
    3. Divorce
    4. Other tax issues
  3. Other alternative methods for multi-generational gifting and long-term planning

Benefits

The panel will review these and other key issues:

  • What are the critical considerations for the use of SLATs in estate planning?
  • How can you incorporate flexibility and options into you SLATs, and what are the pitfalls to avoid?
  • What is the impact of joint property? What if the property is not held in the desired grantor’s name?
  • What tax issues arise in the use of SLATs under current tax law?
  • How does a divorce impact SLATs?
  • What are other methods available for multi-generational gifting and long-term planning?

Faculty

Braverman, Diedre
Diedre Wachbrit Braverman

Attorney
Braverman Law Group

Ms. Braverman practices in the areas of estate planning, special needs planning, asset protection, elder law and...  |  Read More

Grassgreen, Randi
Randi M. Grassgreen

Member
Hutchinson Black and Cook

Ms. Grassgreen has provided advice in the areas of sophisticated estate, wealth transfer, income tax and philanthropic...  |  Read More

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Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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