With the longer lifespans we now enjoy and the expensive healthcare costs we now face, one strategy to consider is to use gifts to purchase life insurance as a gift for your heirs, and to do so with a trust arrangement known as a SLAT.
A SLAT, or "Spousal Lifetime Access Trust" enjoyed the spotlight in a recent WealthManagement.com article titled "SLATs and Life Insurance: Have Your Cake and Eat it Too."
Now, knowing how to have your cake and eat it too can require a complex bit of planning. However, done right, such planning can be powerful. Problem: when life insurance is "owned" by an individual it ends up counting towards their estate value by virtue of such "incidents of ownership." Nevertheless, a Spousal Lifetime Access Trust that owns a life insurance policy (a tactic normally seen in traditional Irrevocable Life Insurance Trusts) will allow access on the part of your spouse during their lifetime while also funding the policy for your heirs. If this sounds too good to be true, then it just might be if all of the i's and t's are not dotted and crossed properly.
To learn more about this temperamental and advanced, if potent, device, review the original article. Before taking action, however, consult with your estate planning attorney to determine whether a SLAT might be appropriate for you.
As with all things estate planning, this is not a DIY project.
Reference: Wealth Management.com (October 17, 2012) "SLATs and Life Insurance: Have Your Cake and Eat it Too"