There are many different types of trusts that can be created. However, most require some level of tradeoff between estate tax minimization and access to the trust assets. A spousal lifetime access trust (SLAT) can offer the best of both worlds, according to the Wills, Trusts & Estates Prof Blog in "Exploring the Spousal Lifetime Access Trust."
A SLAT is an irrevocable trust that one spouse, the settlor-spouse, creates for the benefit of the other spouse, the beneficiary-spouse. Through use of the gift tax exemption, the beneficiary-spouse can access trust assets including income, during his or her lifetime. The settlor-spouse might then have access to funds through the beneficiary-spouse. Children of the beneficiary-spouse can also be named as beneficiaries.
There are potential drawbacks for the settlor-spouse with a SLAT. If the couple gets divorced, the settlor-spouse will likely lose access to trust assets. The same thing can happen, if the beneficiary-spouse passes away first, depending on other estate planning decisions that were made.
Janet Brewer has practiced California estate, gift-planning, and probate law exclusively for more than 20 years. Our team can advise you on creating an estate plan that fits your unique circumstances and could include a SLAT. Contact us for more information.
Reference: Wills, Trusts & Estates Prof Blog (April 16, 2018) "Exploring the Spousal Lifetime Access Trust."