Spousal Lifetime Access Trusts: A Flexible Tool for Oklahoma Estate Planning

When Oklahoma families consider estate planning, most focus on asset distribution and probate avoidance. However, couples with significant wealth face an additional challenge: reducing estate tax exposure while maintaining financial flexibility. A Spousal Lifetime Access Trust (SLAT) can help accomplish both goals simultaneously.

Understanding Spousal Lifetime Access Trusts

A SLAT is an irrevocable trust that one spouse establishes for the other’s benefit. By transferring assets into the trust, couples remove those assets (and their future growth) from the grantor’s taxable estate. This can reduce estate tax exposure while allowing the beneficiary spouse to receive distributions when needed.

Simply put: a SLAT helps protect wealth from estate taxes while keeping assets accessible to support your family.

Why Oklahoma Couples Choose SLATs

SLATs provide a unique combination of tax efficiency and family access, offering several key advantages:

Estate Tax Benefits

Assets placed in a SLAT, including appreciation, are excluded from the grantor’s taxable estate. With current federal estate tax exemptions historically high, transferring appreciating assets now can generate substantial long-term savings.

Continued Family Access

Because the other spouse serves as the trust’s primary beneficiary, couples maintain indirect access to trust assets through distributions. This provides financial security while achieving tax benefits.

Asset Protection Features

Depending on the trust’s terms and applicable state law, SLAT assets may be better insulated from certain personal creditors, adding an additional layer of protection for family wealth.

Multi-Generational Planning

SLATs can benefit children and grandchildren, creating lasting family legacies and, when appropriate, incorporating generation-skipping transfer (GST) planning.

Important SLAT Considerations

While powerful, SLATs require careful evaluation:

Irrevocability: Asset transfers cannot be reversed, making thoughtful asset selection crucial. Note that assets gifted to an SLAT generally do not receive a step-up in basis at death.

Spousal Dependence: If the beneficiary spouse dies or the couple divorces, the grantor loses indirect access to trust assets.

Technical Complexity: Proper implementation typically involves filing a gift-tax return for funded gifts and coordinating GST allocations when appropriate. Experienced legal and tax guidance helps avoid pitfalls (including the reciprocal trust doctrine for couples considering dual SLATs).

When SLATs Make Sense for Oklahoma Families

Consider a SLAT if you:

• Have an estate potentially subject to federal estate taxes
• Own appreciating assets like business interests, investment portfolios, or real estate
• Value asset protection combined with family accessibility

Professional Guidance for SLAT Planning

SLATs are sophisticated tools that demand coordinated legal, tax, and financial advice. At Littleton Legal, we help Oklahoma families evaluate whether SLATs align with their goals and design plans that balance tax strategy, family access, and long-term legacy.

If you’re exploring advanced estate planning techniques to protect family wealth while maintaining access, schedule a consultation or call (918) 608-1836. Let’s discuss whether a SLAT, or another strategy, fits your family’s future.