What is Spousal lifetime access trust?
In short
A spousal lifetime access trust is an irrevocable trust one spouse creates for the other spouse (and often their descendants), using the creator's lifetime gift tax exemption to move assets out of both spouses' estates.
Key takeaways
- The creator keeps indirect access to the assets through the beneficiary spouse.
- That access ends if the beneficiary spouse dies or the couple divorces.
- It is usually a grantor trust, so the creator pays tax on its income.
Where it's tested
TCP: Estate & Gift Tax Planning — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
A client's total estate is well below the $15 million exemption. The client asks whether to gift highly appreciated stock to children now or hold it until death. From a pure tax standpoint, which is generally better and why?