Spousal Lifetime Access Trust (SLAT): Definition and How It Works in California

By Eric Ridley, attorney, Ridley Law. Updated October 2026.

A spousal lifetime access trust (SLAT) is an irrevocable trust one spouse creates for the other, using the creator’s gift tax exemption. The assets and their growth leave the creator’s taxable estate, while the beneficiary spouse, and often the children, can still receive distributions.

How it works in California

Ridley Law has a full SLAT guide. Funding a SLAT uses the creator’s lifetime exemption, which is $15,000,000 per person for 2026 (Rev. Proc. 2025-32). Because trust income can be paid to the creator’s spouse, the trust is a grantor trust under 26 U.S.C. § 677(a), and the creator keeps paying its income tax.

In California the hard part is community property. A SLAT has to be funded with the creator’s separate property. If half the asset belongs to the beneficiary spouse, that half is the beneficiary’s own transfer to a trust for their own benefit, which can pull it back into their estate under 26 U.S.C. § 2036(a). Changing community property into separate property takes a transmutation, which is valid only if made in writing by an express declaration joined in or accepted by the spouse whose interest is reduced (Fam. Code, § 852(a)).

Why it matters

A SLAT lets a married couple use the exemption now while keeping access to the money through the beneficiary spouse. In a hypothetical, a couple with a $40 million estate moves $15 million of one spouse’s separate property into a SLAT. Everything that $15 million earns from then on grows outside the creator’s estate, and the beneficiary spouse can still receive distributions if the family needs them.

Common mistakes

Two spouses signing mirror-image SLATs for each other. Under United States v. Estate of Grace (1969) 395 U.S. 316, interrelated trusts that leave each spouse in about the same economic position are uncrossed, and both can fail. Funding with community property without a written transmutation. And counting on the spouse’s access as if it were the creator’s own. If the beneficiary spouse dies, or the marriage ends and the trust defines “spouse” narrowly, that access can end.

Related terms

• Intentionally Defective Grantor Trust (IDGT): a SLAT is usually a grantor trust, so the creator pays tax on its income.
• Reciprocal Trust Doctrine: the rule that can undo two SLATs spouses create for each other.
• Dynasty Trust: a SLAT can be drafted to continue for grandchildren once the spouse dies.
• Crummey Power: children named in a SLAT sometimes hold withdrawal rights so annual gifts qualify for the exclusion.
• Community Property: SLAT funding has to come from separate property, not community property.
• Grantor Trust: a SLAT is a grantor trust because income can go to the creator’s spouse.

Part of the California estate planning glossary. For the full treatment, see Do You Still Need a SLAT After the 2026 Tax Law? (California).