Estate Planning Strategies to Protect Your Spouse
In recent posts, we’ve discussed topics such as divorce and estate planning as well as disinheriting a spouse. This week, let’s focus on what you can do to protect your spouse in estate planning. Marriage legally positions you to provide long-term financial security for your spouse through legal tools and trust-based planning strategies. With thoughtful preparation, structure your estate plan to protect your spouse during your life and after your death.
Lifetime QTIP Trust: Ongoing Support with Future Flexibility to Protect Your Spouse
A lifetime Qualified Terminable Interest Property (QTIP) trust enables one spouse—typically the wealthier partner—to transfer assets into a trust for the benefit of the other spouse. The beneficiary spouse receives trust income for life and may also access principal for specific purposes such as medical care, education, or other defined needs.
This trust applies well to second marriages. In fact, grantor provides for their spouse while ensuring to pass remaining assets to children from a previous marriage or other chosen beneficiaries. In addition to supporting a spouse, a properly drafted QTIP trust can also offer creditor protection and reduce estate tax exposure.
If the beneficiary spouse dies first, the trust may continue (subject to state law) for the benefit of the grantor. Conversely, when death strikes, any unused estate tax exemption from the beneficiary spouse applies to the trust assets included in their estate. With the right drafting, the court excludes remaining trust property from the grantor’s estate after death. Thus, this benefits future generations.
It’s important to note that lifetime QTIP trusts are irrevocable. If a marriage ends in divorce, the former spouse may remain entitled to income unless the trust explicitly defines the beneficiary as the current spouse. An experienced estate planning attorney can help you draft provisions to protect your intent.
Protect Your Spouse–SLAT: Indirect Access with Strategic Tax Advantages
A Spousal Lifetime Access Trust (SLAT) allows one spouse to gift assets into a trust for the benefit of the other spouse. This type of trust is also irrevocable, but unlike a QTIP trust, it doesn’t require that the beneficiary spouse receive income. Instead, distributions may include income and/or principal based on the grantor’s intent.
SLATs are particularly useful for removing assets from the grantor’s taxable estate while still offering indirect access to the funds through the beneficiary spouse. Estate planners tailor this approach to support other family members, such as children or grandchildren, as current beneficiaries.
Divorce can complicate SLAT arrangements. If the marriage ends, the grantor generally loses indirect access to the trust property. To safeguard against this, trusts can include definitions that limit benefits to a current spouse or assign additional beneficiaries to ensure flexibility.
For couples who both want to create SLATs, special care must be taken to avoid the “reciprocal trust doctrine.” Drafting trusts that are too similar can result in IRS scrutiny and nullification of the tax benefits. Professional legal guidance is essential.
Community Property and Trust Funding
If you live in a community property state or have acquired community property during your marriage, it’s essential to understand how this impacts your estate plan. Assets titled as community property may require a partition agreement to be transferred into an irrevocable trust such as a SLAT or QTIP.
A partition agreement allows spouses to convert community property into separate property before placing it into trust. This change must be carefully documented and structured to preserve tax benefits and legal clarity. An estate planning attorney can guide you through the process to ensure legal compliance and avoid unintended consequences.
Portability: Extending the Estate Tax Exemption
Even if you don’t currently expect to face estate tax issues, changes in federal law could affect your estate plan. The current federal estate tax exemption is $13.99 million per individual for 2025, but it’s scheduled to decrease significantly—possibly to around $5 million—when the current law sunsets at the end of 2025.
Portability is a strategy that allows the surviving spouse to use any unused portion of the deceased spouse’s estate tax exemption. This combined exemption amount can offer substantial tax savings and estate protection.
To take advantage of portability, the executor of the deceased spouse’s estate must file IRS Form 706 within nine months of death (or longer if an extension is granted). Failing to file this return forfeits the ability to use the unused exemption.
One important note: the deceased spouse’s unused exclusion (DSUE) can only be applied from the most recently deceased spouse. If the surviving spouse remarries, the prior DSUE may be lost unless used beforehand.
Planning with Professional Guidance
The legal tools available to married couples offer significant flexibility—but they must be structured carefully. Lifetime QTIP trusts, SLATs, and portability strategies require detailed knowledge of federal tax law, trust drafting, and local property laws. The risk of unintended consequences is high without qualified legal help.
At Skvarna Law, we work with couples across Southern California to develop comprehensive estate plans that protect spouses, support future generations, and adapt to changing circumstances. If you’re ready to explore which strategies make the most sense for your family, we’re here to help.
About Skvarna Law in Glendora and Upland, California
Skvarna Law helps individuals and families across Southern California with estate planning, wills, trusts, and elder law. With offices in Glendora and Upland, the firm provides strategic, compassionate guidance tailored to each client’s goals. Whether you’re planning for your own future or protecting the people you love, Skvarna Law makes complex legal decisions easier to understand and manage. Visit skvarnalaw.com to schedule a consultation.
