Spousal Lifetime Access Trusts

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If you and your spouse have worked hard to build wealth in Atlanta, Georgia, you probably want to protect it, pass it on, and still have access to it during your lifetimes. That is a tall order for most estate planning tools. But a Spousal Lifetime Access Trust, commonly called a SLAT, is one strategy that can help you do all three. At Slowik Estate Planning, located in Atlanta, Georgia, we help married couples understand how a SLAT fits into a complete estate plan and whether it makes sense for their specific situation. This page explains what a SLAT is, how it works under federal and Georgia law, and what you need to know before moving forward.

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What Is a Spousal Lifetime Access Trust (SLAT)?

A SLAT is a type of irrevocable trust. One spouse, called the donor spouse or grantor, transfers assets into the trust for the benefit of the other spouse, called the beneficiary spouse. The donor spouse gives up ownership of those assets permanently, but the beneficiary spouse can still receive distributions from the trust during their lifetime.

A SLAT is an irrevocable trust designed to provide income to a beneficiary spouse while removing the principal assets from the donor spouse’s taxable estate. That is the core idea. The donor spouse removes wealth from their taxable estate while the couple still has some access to those assets through the beneficiary spouse.

The gifting spouse transfers assets into the trust with the intention of removing their value from the gifting spouse’s estate for estate-tax purposes. Because the gifting spouse’s exemption is applied to the transferred assets, both the assets and any post-gift appreciation on them are sheltered from federal estate taxes upon the deaths of the gifting spouse and the beneficiary spouse.

Because SLATs are typically structured as so-called “grantor trusts” for income tax purposes, the gifting spouse remains personally responsible for paying all income taxes attributable to the trust assets, allowing the SLAT to grow income tax-free. That is a significant benefit. The trust grows without being reduced by income taxes, which means more wealth passes to your family over time.

Under the Revised Georgia Trust Code, O.C.G.A. Title 53, Chapter 12, Georgia law recognizes and governs irrevocable trusts. Georgia’s trust framework provides a solid legal foundation for establishing a SLAT in this state. The creation of a joint irrevocable trust for married couples in Georgia requires careful attention to detail and compliance with legal mandates. The process involves drafting a clear, written declaration with explicit intentions, identifying trust property, establishing a trustee, and notifying beneficiaries. Working with Slowik Estate Planning in Atlanta means you have a knowledgeable team guiding every step of that process.

How the Federal Estate Tax Exemption Affects Your SLAT Strategy in 2026

The federal estate tax exemption is one of the most important numbers in estate planning right now. Understanding where it stands in 2026 helps you see why a SLAT deserves serious attention.

The enactment of the One Big Beautiful Bill on July 4, 2025 set federal gift, estate, and GST exemption amounts to an unprecedented $15 million per individual and $30 million per married couple, effective January 1, 2026. That is a historic high. Now that legislation has preserved the high federal estate and gift tax exemption ($15 million in 2026, increasing for inflation starting in 2027), couples interested in maximizing use of their exemptions will have continued opportunities to contribute to a SLAT over time.

Why does this matter for a SLAT? When you transfer assets into a SLAT, you apply your lifetime gift and estate tax exemption to that transfer. Once the donor spouse establishes the trust, they fund it with a gift. This gift is not taxable because the donor spouse uses their lifetime gift and estate tax exemption when transferring assets to the SLAT.

The most tax-efficient result is for the beneficiary spouse not to request a distribution from the trust unless it is truly necessary. In this way, the SLAT’s assets can increase in value during the lifetime of the beneficiary spouse and ultimately pass to the other beneficiaries without any further estate or gift tax.

It is also worth noting that assets held inside a SLAT do not receive a stepped-up income tax basis at the donor spouse’s death. This follows from IRS Revenue Ruling 2023-2, which confirmed that assets in an irrevocable grantor trust that are not included in the decedent’s gross estate under Chapter 11 do not receive a basis adjustment to fair market value under Internal Revenue Code Section 1014(a) at the grantor’s death. In plain terms, if your assets have appreciated significantly, you will want to weigh the estate tax savings against the potential capital gains tax cost for your heirs. This is a conversation worth having with Slowik Estate Planning before you fund a SLAT.

How a SLAT Works Under Georgia Law

Setting up a SLAT in Georgia requires more than just signing a document. You need to understand how Georgia’s trust laws interact with the federal tax rules that make a SLAT work.

Georgia’s irrevocable trust rules are found in O.C.G.A. Title 53, Chapter 12. Once assets are transferred into a SLAT, the trust cannot be modified or revoked, and the assets cannot be returned to the donor spouse. This permanence is crucial for excluding the assets from the donor spouse’s taxable estate. Georgia law reinforces this principle. Under O.C.G.A. § 53-12-61, an irrevocable trust can only be modified or terminated under limited circumstances, generally requiring court approval and the consent of the settlor and all qualified beneficiaries during the settlor’s lifetime.

A trustee, who can be the beneficiary spouse, another individual, or multiple co-trustees, manages the SLAT’s assets. The trustee’s role is to ensure that the assets are used according to the trust’s terms and in the best interests of the beneficiary spouse. Choosing the right trustee is one of the most important decisions you will make when setting up a SLAT.

The beneficiary spouse is entitled to receive distributions from the SLAT during their lifetime. These distributions are typically in the form of income generated by the trust’s assets. This setup provides the beneficiary spouse with financial support while keeping the principal of the trust intact and outside the donor spouse’s taxable estate.

Upon the death of the beneficiary spouse, the assets remaining in the SLAT are distributed to the named beneficiaries. These distribution beneficiaries are often the couple’s children but can be anyone other than the donor spouse. The assets are transferred to these beneficiaries free of estate taxes, offering a significant tax advantage.

Georgia’s spendthrift trust provisions under O.C.G.A. § 53-12-80 through § 53-12-83 can also be incorporated into a SLAT. A spendthrift clause limits the ability of creditors to reach the beneficiary spouse’s interest in the trust, adding a layer of protection. If you want to learn more about how this type of trust connects to broader Asset Protection Lawyer strategies, Slowik Estate Planning can walk you through the options.

The Reciprocal Trust Doctrine and Dual SLAT Planning

Many couples ask whether both spouses can each create a SLAT for the other. The answer is yes, but you must be careful. The IRS uses something called the Reciprocal Trust Doctrine to challenge these arrangements when the two trusts are too similar.

The IRS closely scrutinizes mutual SLATs under the Reciprocal Trust Doctrine. This doctrine essentially untangles trusts that are too similar, treating each spouse as if they created a trust for themselves, which negates tax benefits. If the IRS successfully applies this doctrine, the assets get pulled back into each spouse’s taxable estate, and the whole strategy falls apart.

The Reciprocal Trust Doctrine is most concerned with “interrelated” SLATs which leave both spouses essentially in the same “economic position” both before and after the SLATs are created. Where the doctrine applies, the IRS could collapse a dual-SLAT structure and take the position that each spousal beneficiary simply created his or her own SLAT.

In properly planning with SLATs, it is necessary to differentiate the trusts in terms of assets, trustee powers, and beneficiary interests to avoid triggering the Reciprocal Trust Doctrine. For example, one SLAT might be funded with real estate while the other is funded with investment accounts. One might give the beneficiary spouse mandatory distributions while the other gives the trustee full discretion. The timing of when each trust is created and funded can also matter.

This is where careful drafting becomes critical. A poorly structured dual-SLAT arrangement can do more harm than good. The team at Slowik Estate Planning in Atlanta, Georgia reviews these details carefully to help ensure your trust structure is both legally sound and tax-efficient. If you also have assets in other countries or hold foreign investments, our International Estate Planning practice can address those additional considerations.

It is also worth noting that since the primary beneficiary of a SLAT is typically the donor’s spouse, the marriage’s long-term stability and the beneficiary spouse’s life expectancy needs to be a factor when planning. If the couple divorces or the beneficiary spouse dies, the donor spouse no longer has indirect access to the trust assets, and the trustee distributes them to the other beneficiaries. This is a real risk that deserves an honest conversation before you proceed.

Is a SLAT Right for Your Atlanta Estate Plan?

A SLAT is not the right tool for every couple. It works best in specific situations, and understanding those situations helps you make a smart decision.

The strategy is most beneficial when the transferred assets are expected to appreciate in value, as the growth occurs outside the taxable estates. SLATs are particularly advantageous for individuals whose wealth exceeds the new estate tax exemption amount. If your combined estate is well below $15 million per person, a SLAT may not be necessary from a tax standpoint, though it can still serve asset protection and wealth transfer goals.

A SLAT also works well alongside other estate planning tools. For example, you might use a SLAT together with carefully drafted wills to create a complete and coordinated plan. Your will can direct assets that fall outside the trust, name guardians for minor children, and address other matters a SLAT cannot handle on its own.

For those with larger estates who want a broader look at tax reduction strategies, our Estate Tax Planning in Atlanta Georgia practice covers a full range of options, including SLATs, charitable trusts, and other advanced planning tools.

Here are some questions worth asking yourself. Do you and your spouse have assets that are likely to grow significantly over the next decade? Do you want to reduce your taxable estate while still allowing your spouse to access funds if needed? Are you comfortable making an irrevocable gift, knowing you cannot take the assets back? If you answered yes to these questions, a SLAT may deserve a closer look.

While a SLAT is not suitable for everyone, it can be effective in specific situations, particularly for individuals with highly appreciating assets or those who can gift assets near the current federal estate tax exemption limit. Implementing a SLAT requires careful planning and close collaboration with legal and tax advisors. Slowik Estate Planning works closely with your tax advisors and financial planners to make sure your SLAT fits into the bigger picture. Contact us today at our Atlanta, Georgia office to schedule a consultation and find out whether a SLAT belongs in your estate plan. You can also visit our estate planning attorney in Atlanta page to learn more about the full range of services we offer.

FAQs About Spousal Lifetime Access Trusts in Atlanta, Georgia

Can the donor spouse ever access funds from a SLAT?

The donor spouse cannot directly receive distributions from a SLAT. However, as long as the marriage continues, the donor spouse may benefit indirectly because the beneficiary spouse can receive distributions and use those funds to support the couple’s shared lifestyle. If the marriage ends through divorce or the death of the beneficiary spouse, the donor spouse loses that indirect access entirely. This is one of the most important risks to understand before funding a SLAT.

What assets can be transferred into a SLAT in Georgia?

A donor spouse can transfer a wide variety of assets into a SLAT, including cash, investment accounts, real estate, life insurance policies, and interests in closely held businesses. The key requirement is that the assets must be individually owned by the donor spouse, not jointly owned with the beneficiary spouse. Georgia is not a community property state, so most married couples in Atlanta hold assets in individual or joint names, which gives them flexibility in choosing what to transfer. Your attorney will review ownership before any transfer is made.

Does a SLAT avoid probate in Georgia?

Yes. Because assets held inside an irrevocable trust like a SLAT are no longer owned by the donor spouse, they do not pass through probate at the donor spouse’s death. This can save time and keep your financial affairs private, since probate records in Georgia are public. The trust document governs how the assets are managed and distributed, which means your wishes are carried out without court involvement. This is one of the practical benefits of trust-based planning beyond the estate tax advantages.

What happens to the SLAT if the beneficiary spouse dies first?

If the beneficiary spouse dies before the donor spouse, the trust typically continues for the benefit of the remaining named beneficiaries, such as the couple’s children or grandchildren. The donor spouse does not receive the assets back. Some SLAT documents include provisions that allow a trustee to make discretionary distributions to the children, which may indirectly support the donor spouse if the children choose to help. This scenario is one reason why careful drafting and contingency planning matter so much when setting up a SLAT.

How does IRS Revenue Ruling 2023-2 affect a SLAT?

IRS Revenue Ruling 2023-2 confirmed that assets held in an irrevocable grantor trust, like a SLAT, do not receive a stepped-up income tax basis at the grantor’s death if those assets are not included in the grantor’s taxable estate. In practical terms, this means your heirs will inherit the trust assets at your original cost basis, not at the fair market value on the date of your death. For assets that have appreciated significantly, this can create a capital gains tax burden when those assets are eventually sold. This trade-off between estate tax savings and capital gains tax costs is something Slowik Estate Planning carefully analyzes with each client before a SLAT is funded.

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