Short answer: Probably not, and the urgency you may have heard about is gone. The 2025 “sunset” that had everyone rushing to set up SLATs before the exemption dropped was repealed — the federal exemption is now $15,000,000 per person and permanent (P.L. 119-21). A SLAT (spousal lifetime access trust) still has real uses, but if your estate is comfortably under about $30 million as a couple, you most likely don’t need one right now.
Figures verified against IRC § 2010(c) and the 2026 federal exemption ($15,000,000/person, permanent, under P.L. 119-21), 2026. This is general information, not legal advice for your situation.
What changed — and why the SLAT rush is over
For a few years, estate planners pushed SLATs hard with a “use it or lose it” pitch. The logic: the high exemption was scheduled to sunset at the end of 2025 and drop to roughly $7 million per person in 2026. If you didn’t lock in the bigger exemption by gifting assets into a SLAT before the deadline, you’d lose it. That created genuine urgency for wealthy couples.
That deadline no longer exists. The One Big Beautiful Bill Act repealed the sunset and set the exemption at $15,000,000 per person, permanent (indexed for inflation going forward). California has no state estate tax and no state gift tax to complicate that. So the manufactured “act before 2026” pressure is dead. If someone is still selling you a SLAT on urgency, they’re working from an old script.
What a SLAT is (and what it still does)
A SLAT is an irrevocable trust one spouse creates and funds for the benefit of the other spouse (and often the kids). You gift assets into it, using part of your exemption. Because it’s irrevocable and you’ve given the assets away, they’re generally out of your taxable estate — but because your spouse is a beneficiary, your family still has indirect access to the money. That’s the appeal: get assets out of the estate without fully cutting off access.
Stripped of the fake urgency, a SLAT still has legitimate uses:
- Moving future appreciation out of your estate. Gift a $3 million asset into a SLAT today, and if it grows to $8 million, that entire $8 million — growth included — sits outside your taxable estate. For estates well above the exemption, this is the strongest reason.
- Asset protection. A properly structured irrevocable trust can put assets beyond the reach of future creditors — useful for a surgeon, a business owner, or anyone in a high-liability field.
- Locking in exemption for a truly large estate. Even without a sunset, a couple far above $30 million may want to use both spouses’ exemptions now through SLATs rather than leaving planning for later.
Who actually needs one
Here’s the honest version. With a $15,000,000 per-person exemption, a married couple can pass roughly $30 million to their family with no federal estate tax — before any planning at all. So:
- Estate comfortably under $30 million as a couple? You almost certainly don’t need a SLAT right now. Your combined exemptions already cover you, and a SLAT is an irrevocable, permanent giving-away of assets — not something to do without a real reason.
- Estate approaching or above $30 million, or growing fast? Now a SLAT earns its complexity, mainly by freezing future appreciation outside your estate.
- Serious creditor exposure? The asset-protection use can justify one even below the estate-tax thresholds — but that’s a specific, deliberate decision, not a default.
A word of caution most SLAT pitches skip: it’s irrevocable. Once assets go in, you can’t simply take them back. If you divorce, or the beneficiary spouse dies, your indirect access can vanish. And funding both spouses’ SLATs identically can trigger the “reciprocal trust doctrine,” which unwinds the whole benefit. This is real, high-end planning — not a form to download. A regular, well-funded revocable living trust handles probate avoidance and incapacity for the vast majority of families without giving anything away.
Do I still need a SLAT now that the exemption is permanent?
For most families, no. The 2025 sunset that drove SLAT urgency was repealed, and the exemption is now $15,000,000 per person, permanent. A SLAT mainly makes sense for estates approaching or above about $30 million as a couple, or for specific asset-protection goals.
Is there still a deadline to set up a SLAT before 2026?
No. The One Big Beautiful Bill Act repealed the scheduled sunset, so the “use it or lose it before 2026” deadline no longer exists. There’s no ticking clock forcing a decision this year.
What does a SLAT still do if the exemption is so high?
It can move future appreciation out of your taxable estate, provide creditor protection, and lock in exemption for very large estates. Those are real benefits for the right family — they’re just no longer tied to an expiring deadline.
What are the downsides of a SLAT?
It’s irrevocable, so you can’t take the assets back. Access runs through your spouse, so divorce or the death of the beneficiary spouse can cut off that access. Setting up both spouses’ trusts identically can also trigger the reciprocal trust doctrine and undo the tax benefit.
Does California have its own estate or gift tax that a SLAT addresses?
No. California has no state estate tax and no state gift tax, so a SLAT is purely a federal estate-tax and asset-protection tool here, relevant only to larger estates.
The bottom line
The SLAT sales pressure was real, but the deadline behind it is gone. With a permanent $15,000,000 exemption per person, a couple under about $30 million generally doesn’t need one — and a SLAT is a permanent giving-away of assets, so it’s not a step to take casually. If your estate is well above that line, or you have genuine creditor exposure, a SLAT can still do real work, and that’s worth a careful conversation. But you shouldn’t set one up because a clock told you to. If you want an honest read on whether your estate is even in SLAT territory — or whether a straightforward trust covers you — that’s exactly the kind of thing we sort out in planning for higher-net-worth families. Talk to Eric.
Sources: IRC § 2010(c) (applicable exclusion amount); P.L. 119-21 § 70106 (One Big Beautiful Bill Act — 2026 exemption $15,000,000/person, permanent, repealing the scheduled sunset); IRC § 2056(a) (unlimited marital deduction). California has no state estate tax and no state gift tax.
Want a straight read on where you stand?
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