Episode summary
Talking Trusts & Estates for Advisors: Planning With Spousal Lifetime Access Trusts
Summary
The discussion explains spousal lifetime access trusts, or SLATs, as an irrevocable trust strategy used by married high-net-worth clients to move assets out of the taxable estate while keeping the other spouse as beneficiary. The guest says SLATs are often used by couples with millions of dollars to use lifetime exemption, reduce future estate taxes, and preserve indirect access to transferred assets.
The host then explores why clients hesitate to complete large gifts. The guest argues that SLATs have become popular because they offer a middle ground: some control and financial security remain through the spouse beneficiary, unlike outright gifts to children or charity. He notes that this can be especially useful in places like Delaware and Nevada, where clients are comfortable with the trust structure.
The conversation then turns to life insurance, which the guest says is not required for a SLAT but can add liquidity, certainty, and funding for estate taxes or hard-to-sell assets. He argues that life insurance works well in trust planning because it pays at death, can support a family business or other illiquid holdings, and gives a known dollar amount when uncertainty is highest.
Key takeaways
- The guest says SLATs let one spouse transfer assets into an irrevocable trust while the other spouse remains beneficiary, helping reduce estate tax exposure.
- The guest argues SLATs appeal to hesitant clients because they preserve some indirect access and control, unlike gifts that feel fully gone.
- The guest says life insurance can be layered onto a SLAT to create liquidity for estate taxes, business continuity, or other trust costs.
- The guest says life insurance is popular in trusts because it delivers a known amount of cash at death, when liquidity is often needed most.
- The guest says the combined appeal of SLATs and life insurance is tax mitigation plus cash certainty for long-term wealth transfer.
Notable quotes
“the spousal lifetime access trust often we're seeing dual so you're you're often going to see one for the husband one for the wife”
“Usually, we're talking about people with millions and millions of dollars, and they will use up essentially their lifetime exemption amount”
“this gives us a little bit more certainty about our own financial security”
“life insurance can be a good way to build up wealth for a transfer doing it outside the estate and then providing liquidity”
“one is about tax mitigation, transfer and control. The other one, life insurance, is about cash and certainty”
How the episode opens
Hello, I'm Susan Lib, editor and chief of Trust and Estates, and I'm speaking with Jamie Hopkins, CEO of Binmar Trust Advisors LLC and chief wealth officer at Binmar Trust. Today we'll be discussing life insurance planning with spousal lifetime access trust. Uh we had an article on this topic in the April issue of trust in estates written by Robert Finnegan.
So let's start by understanding a complex giving strategy known as slats which as I mentioned stands for spousal lifetime access trust that can be helpful for spouses and the next generation. Jamie, can you just briefly walk us through what are slats?
It's great to see and yeah we'll we'll start off with just this brief understanding of what slats are. I think uh you know our industry likes a lot of uh you know different uh abbreviations of words and threeletter four-letter acronyms and this is one. So as you mentioned the spousal lifetime access trust often we're seeing dual so you're you're often going to see one for the husband one for the wife or the two spouses in the situation but this is really a irrevocable trust in which one spouse will transfer their assets into it.
Usually, we're talking about people with millions and millions of dollars, and they will use up essentially their lifetime exemption amount, help reduce estate taxes in these situations, move it out of their estate, but the other spouse is the beneficiary. So, can indirectly they still have access to these assets, but appreciation and their lifetime exemption amounts have been kind of removed from the estate. So just backing big picture using a trust where your spouse is the beneficiary removing these assets from your estate that's the starting point here and most of the times we are talking about ultra high netw worth individuals meaning somebody that might be running uh into actual state tax payments in the future.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- slats
- estate planning
- trusts and estates
- spousal lifetime access trusts
- life insurance in trusts
Companies and tickers mentioned
- Bryn Mawr Trust
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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