Trust comparison

Compare the structure—not just the name

Review broad differences in purpose, control, access, taxes, protection, complexity, and typical use. The right question is rarely “Which trust is best?” It is “What legal and planning problem is this structure intended to address?”

Simple explanationStart with purpose, revocability, and who can access assets.
Go deeperThen examine document terms, tax status, state law, administration, funding, and unintended consequences.

2 structures selected

Simple explanation

SLAT

Spousal Lifetime Access Trust

A SLAT is an irrevocable lifetime gift trust created by one spouse for the other spouse and often descendants, seeking to move assets outside the donor's estate while preserving indirect family access through discretionary distributions.

Designed mainly for
Use lifetime exclusion while allowing discretionary support for a spouse.
Control
Distributions should be fiduciary decisions, not a side agreement; divorce and spouse-death contingencies need design attention.
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Two identical trusts
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ILIT

Irrevocable Life Insurance Trust

An ILIT is an irrevocable trust designed to own or receive life insurance and manage proceeds, often seeking liquidity and exclusion from the insured's gross estate when ownership and administration rules are satisfied.

Designed mainly for
Hold insurance outside the insured's estate and provide managed liquidity.
Control
The insured must not exercise policy ownership rights; trustee should independently monitor carrier strength, illustrations, premiums, and beneficiary needs.
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Insured changes policy
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Go deeper

Side-by-side reference

General educational comparison. Actual results depend on document terms, funding, tax status, timing, state law, and individual facts.
Comparison pointSpousal Lifetime Access TrustIrrevocable Life Insurance Trust
Primary purposeUse lifetime exclusion while allowing discretionary support for a spouse.Hold insurance outside the insured's estate and provide managed liquidity.
Revocable or irrevocableirrevocableirrevocable
Grantor access to assetsno direct right; indirect household benefit only through spousenone to policy or proceeds if estate exclusion is intended
Estate-tax reduction potentialhigh potentialhigh potential for death benefit
Asset-protection featuresoften meaningful for beneficiariesoften meaningful for beneficiaries
Income-tax treatmentoften grantor trust, design-dependentoften grantor trust during insured's life, design-dependent
Beneficiary accessspouse and often descendants under trustee discretionunder trust distribution terms after death
Often considered by married couplesspecifically designed for married couplesoften useful
Business-owner useoften usefuloften useful for liquidity
GST planningpossiblepossible
Charitable usenot primarypossible but specialized
Relative complexityvery highhigh
Typical cost levelvery highhigh plus insurance costs

Questions behind the columns

What a table cannot decide

  1. 01

    What outcome is being explored: incapacity management, probate administration, transfer-tax planning, beneficiary protection, charitable giving, or something else?

  2. 02

    Who may need access to the assets, under what conditions, and who should make distribution or investment decisions?

  3. 03

    Which assets could be funded, what tax basis or valuation issues exist, and what practical administration will be required?

  4. 04

    Which state’s law governs, where do trustees and beneficiaries live, and could situs or state income tax matter?