SLAT vs ILIT for High Net Worth Estate Planning: Which One Protects Your Legacy Best?

SLAT vs ILIT for High Net Worth Estate Planning isn't just a legal distinction—it's a strategic decision that could determine how well your wealth serves your family, both now and for generations to come. https://www.youtube.com/live/CzyssnZbzD0 We were deep into a conversation with Andrew Howell, one of the foremost estate planning attorneys in the country, when he casually dropped a statement that made us pause: "I haven’t drafted a new ILIT in over a decade." Wait… what? For those of us in the world of estate strategy, that kind of remark is the equivalent of a mic drop. And that’s when we knew: the conversation around trusts and legacy planning has shifted in a fundamental way. He wasn’t saying ILITs are obsolete—but that SLATs have become the preferred vehicle for families who want more than just a tax shelter. They want flexibility, values-based guidance, and multigenerational control. That one sentence reframed everything we thought we knew about irrevocable trust structures—and gave us a deeper commitment to educating families about their options. Why This MattersWhat Is a SLAT (Spousal Lifetime Access Trust)?What Is an ILIT (Irrevocable Life Insurance Trust)?SLAT vs ILIT for High Net Worth Estate PlanningAccess to FundsEstate Tax EfficiencyControl and FlexibilityLong-Term Legacy PotentialHow Dynasty Trusts Multiply the ImpactWhat This Means for YouBook A Strategy Call Why This Matters If you’re a high net worth individual navigating the estate planning world, you already know: it’s not just about minimizing taxes. It’s about maximizing impact. You want your wealth to do more than sit in a trust. You want it to: Empower your family. Pass on your values. Stay protected from taxes, lawsuits, and family fragmentation. Serve as a guiding structure for generational growth. That’s what today’s article is about. We’re unpacking SLAT vs ILIT for high net worth estate planning so you can: Understand the pros and cons of each structure. Learn how each trust operates in real-life scenarios. Discover which strategy aligns with your long-term legacy goals and family dynamics. And if you missed our previous post, The Pros and Cons of an ILIT, that’s a must-read companion to this piece. It sets the stage for why SLATs are now stealing the spotlight. The stakes are too high to leave this decision to a boilerplate legal plan or a one-size-fits-all document. You deserve a legacy plan as unique and dynamic as the family you’re building it for. Let’s get into it. What Is a SLAT (Spousal Lifetime Access Trust)? Bruce and I have seen this firsthand: a SLAT is one of the most powerful tools for families who want access, flexibility, and control—while also removing assets from their estate. With a SLAT, you gift assets into an irrevocable trust for your spouse’s benefit. This removes those assets (and any future growth) from your estate, reducing estate taxes and creating protection from creditors. But here’s the real magic: Your spouse can access the trust assets during their lifetime. You (the grantor) can indirectly benefit from those assets. You can build in trust protectors, distribution trustees, and managers for increased control and long-term accountability. And here’s where it gets even more powerful—many families are using SLATs as the foundation for their Family Bank strategy. That means the trust isn’t just a vault—it’s a lending institution. Your children or grandchildren can borrow from the trust to: Start a business Purchase a first home Fund their education But unlike a handout, these loans come with terms, accountability, and stewardship expectations. It’s not entitlement—it’s training. It’s a way to extend trust and responsibility. Andrew emphasized that in states like Nevada, South Dakota, and Delaware, the flexibility of SLATs increases even more. These jurisdictions allow for: Decanting (the ability to modify the trust structure if necessary) Directed trust arrangements Extended perpetuity periods (ideal for dynasty planning) This is a game-changer if you want your plan to adapt as your family evolves, your assets grow, or the law changes. What Is an ILIT (Irrevocable Life Insurance Trust)? ILITs have long been the go-to for families needing a simple, effective estate tax strategy. Here’s how it works: You create a trust that owns your life insurance policy. You make premium payments (either directly or indirectly). When you pass away, the death benefit pays out to your heirs outside of your estate. That means: No estate tax on the life insurance proceeds. Immediate liquidity for your family to cover estate taxes or provide inheritance. Simple. Predictable. Efficient. But here’s the trade-off: You can’t access the cash value. You can’t change the terms once the trust is finalized. You have no flexibility if your family needs