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SLAT Trust - Risk/Reward

Started by Irish247, January 31, 2021, 10:36:21 AM

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Has anyone used a SLAT trust before? I'm considering shifting some security holdings into a SLAT, and thinking of the pros and cons.

They are getting phased out in the next 5 years, but I'm thinking of locking up a couple of them for my wife and I. We would each gift each other a significant amount of stock and assets to ensure protection and to take advantage of the tax free limits.

from fidelity below:

A Spousal Lifetime Access Trust (SLAT) is one of many types of irrevocable trusts utilized for transferring wealth outside of an estate.
SLATs provide an opportunity to take advantage of the current federal exclusion before it sunsets, or expires, on December 31, 2025.
A properly structured SLAT provides the donor limited, indirect access to the trust assets.

I'm planning on opening a slat for my wife, and her to I. I would shift the assets to each of us in there, and then likely still have access if needed from the non-donor.  I also may use the SLAT to purchase additional life insurance just to keep in the wings, for some legacy planning.

Has anyone used this before, or is using it? Any downsides?