A Spousal Lifetime Access Trust (SLAT) is an effective estate planning tool for married couples seeking to preserve wealth in New York City (also referred to herein as NYC). If properly structured, a SLAT can help the trust creator remove assets out of their taxable estate while providing access to income and principal for their spouse and descendants. Further, the growth and appreciation of the assets can be removed from the grantor’s taxable estate in an asset-protected structure.
At Pierro, Connor & Strauss, we have extensive experience creating sophisticated wealth transfer strategies for individuals and families across Manhattan, The Bronx, Queens, Brooklyn and Staten Island, as well as on Long Island and in Westchester County.
Through personalized guidance, our experienced NYC estate planning lawyers can help you implement a NY Spousal Lifetime Access Trust and other wealth preservation tools into your financial plan.
How a SLAT Works
One spouse (the donor or grantor) establishes an irrevocable trust and names the other spouse as its primary beneficiary. When the trust is established, the donor spouse determines how the trust will be structured, the assets that will fund it, the rules governing distributions, and who will serve as trustee.
The donor spouse then transfers assets into the trust, using their federal gift tax exemption to avoid paying gift taxes. These assets and their appreciation remain outside of the donor spouse’s taxable estate for the duration of the trust.
Once the trust is established, the beneficiary spouse and descendants can have access to distributions of principal or income, or assets can be purchased by the SLAT for the benefit of the beneficiaries, according to the terms set forth in the trust document. Provided the trust was properly executed, these distributions will pass to beneficiaries free from estate taxes.
NYC SLAT Planning Team
Louis W. Pierro
