SLAT Planning Power - Washington Estate Planning

Couples with assets valued between $20
million and as high as $50 million typically are reluctant to give away $5
million or $10 million, in case they someday need the gifted assets.? A spousal lifetime access trust (SLAT),
coupled with the purchase by the SLAT of some life insurance, may provide the
best of both worlds:? a completed gift,
removal of trust assets from a couples? gross estate and a tax-favored
leveraged death benefit, all while allowing a beneficiary spouse the
flexibility of retaining tax-efficient access to the policy cash value, if
needed in the future.

The trouble with any gifting
strategy is that any gift is gone once given. While given assets don?t count
against your estate, they also aren?t there if you need them later. This can be
a legitimate concern, whether you have a little or a lot.

With the longer lifespans we now
enjoy and the expensive healthcare costs we now face, one strategy is to use
gifts to purchase life insurance as a gift for your heirs, and to do so with a
trust arrangement known as a SLAT.

A SLAT, or ?Spousal Lifetime
Access Trust? enjoyed the spotlight in a recent WealthManagement.com article titled ?SLATs
and Life Insurance: Have Your Cake and Eat it Too.?

Now, knowing how to have your
cake and eat it too can require a complex bit of planning. However, done right,
such planning can be powerful. Problem: when life insurance is owned by an
individual it ends up counting towards their estate value by virtue of such ?incidents
of ownership.? A Spousal Lifetime Access Trust that owns a life insurance
policy (a tactic normally seen in traditional Irrevocable Life Insurance
Trusts) will allow access on the part of your spouse during their lifetime
while also funding the policy for your heirs. If this sounds too good to be
true, then it just might be if all of the i?s and t?s are not dotted and
crossed properly.

To learn more about this
temperamental and advanced, if potent, device, review the original article and
consult with your estate planning attorney.

Reference: Wealth
Management.com (October 17, 2012) ?SLATs
and Life Insurance: Have Your Cake and Eat it Too?

Source: http://blog.moultonlaw.com/2012/11/slat-planning-power.html

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