If you are thinking about gifting assets before year-end, consider creating an irrevocable trust to receive the gift. You can name the intended gift recipients as the trust beneficiaries, such as children, grandchildren, and even your spouse.

With proper planning, your spouse can be both the primary beneficiary and trustee of the irrevocable trust, providing some control over the gifted assets. This is commonly known as a Spousal Lifetime Access Trust (SLAT). Children and grandchildren are typically included as secondary beneficiaries, so the trustee can distribute assets among your descendants too. SLAT planning offers a flexible way to provide for different generations of your family while removing assets from your taxable estate.

Gifts to a SLAT will use your lifetime exemption from federal estate tax, but will allow the trust’s assets to pass to your children estate tax free. If you apply the generation-skipping transfer tax (GST) exemption, the trust’s assets will pass free of death transfer taxes for multiple generations.

Why Now?

The amount you can currently transfer out of your federal taxable estate is $11.58 million, which may change in 2021. Now is an ideal time to review your estate planning options.

For more information regarding the many benefits of SLAT planning, please call Buckley Fine, LLC at (847) 381-0011 or send us an email.