Couples who have a taxable estate and intend to transfer wealth to their children should be hearing from their advisors about estate and tax planning strategies. Currently, the federal gift and estate tax exemptions are at an all-time high of $11.7 million per individual. However, on December 30, 2025, the exemption amounts are set to revert to pre-2018 levels of approximately $6 million per person. Proper planning can allow families to take advantage of today’s larger exemption amounts by completing current gifts to their heirs either outright or in the form of an irrevocable trust.
But, what is the best course of action when a married couple does not want to miss the opportunity to use this large gift exemption yet they also want to ensure that they can retain access to the funds if needed in the future? The Spousal Lifetime Access Trust (SLAT) is a planning tool that can accomplish both of these objectives.
A SLAT is a current gift of separate property from one spouse to another in the form of an irrevocable trust. This gift is counted against the gifting spouse’s $11.7 million gift tax exemption and the trust assets are then excluded from both spouse’s estates for estate tax purposes. The beneficiary spouse, and in some cases the couple’s children, have access to the Trust assets throughout that spouse’s lifetime. In this way, the trust assets can still be used to support the married couple’s future lifestyle expenses as needed. When the beneficiary spouse passes away, the trust assets are transferred to the children with no additional estate or gift tax due, even when the trust assets have appreciated over time.
At Bordeaux Wealth Advisors, we provide our clients with holistic guidance that includes investment management, financial planning, and estate and tax planning considerations. To learn more about wealth transfer planning and Bordeaux Wealth Advisors, visit www.bordeauxwealthadvisors or call 650-289-1105. We manage the complexities of wealth so you don’t have to.