Ahead of the 2026 drop in the federal gift and estate tax basic exclusion amount, many wealthy couples are considering funding trusts to preserve use of today’s higher exclusion. More specifically, a spouse may move sizable sums into a trust for the other’s benefit – a spousal lifetime access trust or SLAT. But what becomes of this strategy if the couple divorces? How will courts treat these trusts if funded with marital property and what tax consequences might this treatment produce? In this presentation, we will explore the forces driving the creation of SLATs, the implications of divorce on such trusts, and the financial considerations for a couple seeking to address a SLAT in the property settlement process.

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