Spousal Lifetime Access Trusts (SLATs) in Florida

What it is

A SLAT is a lifetime gift in trust. One spouse (the donor) transfers assets to an irrevocable trust for the other spouse (the beneficiary spouse), with the children or other descendants usually named as additional or later beneficiaries. The federal gift tax applies to a transfer "whether the transfer is in trust or otherwise" (26 U.S.C. § 2511(a)), so the transfer is a taxable gift reported on a federal gift tax return, Form 709. In most cases no tax is paid because the gift is absorbed by the donor's basic exclusion amount, which is $15,000,000 for 2026 (26 U.S.C. § 2010(c)(3)).

A SLAT is built to use exemption, not to avoid using it. The gift tax marital deduction is not allowed for a terminable interest when property passes to someone other than the spouse after the spouse's interest ends (26 U.S.C. § 2523(b)). Because the children take after the beneficiary spouse, the gift normally does not qualify for the marital deduction. That is intentional: the point of the trust is to lock in today's exemption and move future appreciation out of the estate. For the larger picture of how the exemption works, see our Florida estate tax planning page.

The donor must give up control for the trust to stay out of the donor's estate. Property is pulled back into the gross estate if the donor keeps the right to its income or enjoyment, or the right to decide who enjoys it (26 U.S.C. § 2036(a)), or keeps a power to alter, amend, revoke, or terminate the trust (26 U.S.C. § 2038(a)(1)). So the donor is not a beneficiary and does not hold those powers. The beneficiary spouse can serve as trustee if the spouse's power to distribute to himself or herself is limited to health, education, support, or maintenance, because a power limited by that ascertainable standard is not a general power of appointment (26 U.S.C. § 2041(b)(1)(A)).

For income tax purposes, a SLAT is usually a grantor trust. The donor is treated as the owner of any portion of a trust whose income may be distributed to the donor's spouse without the consent of an adverse party (26 U.S.C. § 677(a)(1)), and the donor is treated as holding any interest held by the person who was the donor's spouse when the interest was created (26 U.S.C. § 672(e)(1)). The result is that the donor pays the income tax on trust income, which lets the trust grow without paying that tax itself. Under Florida law, a trustee's discretionary power to reimburse the settlor for that income tax does not, by itself, let the settlor's creditors reach the trust (Fla. Stat. § 736.0505(1)(c)).

Florida adds a rule specific to trusts for a spouse. Normally, a creditor of a settlor can reach whatever an irrevocable trust could distribute to the settlor (Fla. Stat. § 736.0505(1)(b)). But for an irrevocable trust in which the spouse is a beneficiary for life, the settlor is not a beneficiary during the spouse's lifetime, and the transfers were completed gifts under § 2511, the trust assets are treated after the spouse's death as contributed by the spouse, not the settlor, for purposes of that creditor rule (Fla. Stat. § 736.0505(3)). The same treatment applies to inter vivos QTIP-type trusts under 26 U.S.C. § 2523(e) and (f). This rule is subject to Florida's fraudulent transfer statute (Fla. Stat. § 726.105). It lets a SLAT include the donor as a later beneficiary if the beneficiary spouse dies first, without that interest alone exposing the trust to the donor's creditors. Whether such a later interest has federal estate tax consequences is a separate question addressed in drafting.

When a SLAT Fits

A SLAT is worth considering when most of the following are true:

• You are married, and your combined net worth is above one spouse's exemption ($15 million in 2026) or is growing toward the couple's combined $30 million.
• You want to use exemption now so that future growth on the gifted assets is outside your taxable estate, but you are not ready to give up all family access to the assets.
• You own assets you expect to appreciate, such as a business interest, investment real estate, or a concentrated stock position.
• You and your spouse are comfortable with the gift being irrevocable, and the marriage is stable. The trust cannot be undone if circumstances change.
• You have enough assets outside the trust to live on without relying on distributions to your spouse.
• You may want the trust to last for grandchildren as well, which raises the separate GST tax covered on our generation-skipping trust page.

If your estate is comfortably below the exemption, a SLAT may cost more than it saves, because assets you give away during life do not receive a new income tax basis at your death the way assets you own at death do (26 U.S.C. § 1014(a)(1)). For many married couples, preserving both exemptions through portability is enough.

When Both Spouses Create SLATs

Couples often want each spouse to create a SLAT for the other, so both exemptions are used. If the two trusts are too similar, and created at about the same time, the IRS can argue under the reciprocal trust doctrine that each spouse really created a trust for his or her own benefit. If that argument succeeds, the trust assets are included in the gross estates the plan was designed to avoid.

Planners reduce this risk by making the trusts different in substance, for example in timing, amounts, assets, beneficiaries, trustees, and the powers each beneficiary spouse holds. No drafting approach removes the risk entirely, so the decision to create two SLATs is made with that risk in view.

How a SLAT Is Set Up

A SLAT starts with numbers, not documents. The first question is how much the donor can give away and still live comfortably without the trust.

• Step 1: Build the balance sheet for both spouses, including which spouse owns each asset. The donor must make the gift from the donor's own property.
• Step 2: Decide how much to give and which assets to use. Assets with strong growth potential move the most value out of the estate.
• Step 3: Choose the trustee and the distribution standard, and decide whether the beneficiary spouse will serve as a trustee limited to health, education, support, and maintenance.
• Step 4: Address divorce, the death of the beneficiary spouse, and, if both spouses are creating trusts, the differences between the two trusts.
• Step 5: Sign the trust, retitle the gifted assets into the trust's name, and obtain qualified appraisals for any hard-to-value assets.
• Step 6: File Form 709 for the year of the gift, report the gift, and decide whether to allocate GST exemption.
• Step 7: Administer the trust as a separate entity: its own account, distribution records, and annual review.

Frequently Asked Questions

The information on this page is for general informational purposes and does not constitute legal advice or create an attorney-client relationship. Florida law changes. Consult a licensed Florida attorney for guidance specific to your matter.