Gifting $5M Into a SLAT Today Can Shelter $14.3M of Future Growth From Estate Tax

The benefit that survived the sunset

We ran $5,000,000 gifted into a SLAT through the calculator, growing at 7% for 20 years, against a 40% combined estate tax rate: the asset grows to $19,348,422 outside either spouse’s estate — $14,348,422 of that is pure appreciation that never needed exemption or faced estate tax, worth $5,739,369 in avoided tax. SLATs used to be pitched with urgency — “use the higher exemption before it sunsets” — but the One Big Beautiful Bill Act of 2025 made the elevated exemption permanent. The freeze benefit modeled here has nothing to do with that deadline: it’s simply what happens whenever an appreciating asset moves out of the estate before it appreciates.

How the math works

futureValueOutsideEstate = giftedValue × (1 + growth)^years, then appreciationSheltered = futureValueOutsideEstate − giftedValue. The gift uses lifetime exemption equal to TODAY’s value only — the growth afterward never needs any exemption at all, unlike an asset held until death, which needs exemption (or faces tax) on its full grown value.

What this tool doesn’t model: trustee/administration costs (see the ILIT tool for an analogous cost structure to layer on top), the “reciprocal trust doctrine” risk if both spouses set up mirror-image SLATs for each other (courts can unwind this), or the beneficiary spouse’s continued access needing an independent trustee to avoid pulling assets back into the estate.

Math runs locally. Inputs never leave your browser. Source on github.

Where this doesn’t apply

• Your estate is comfortably under the $15M/$30M exemption and isn’t expected to grow past it. If the estate will never be exposed to estate tax regardless of growth, there’s no tax to shelter.
• Both spouses would set up nearly identical trusts for each other. The reciprocal trust doctrine lets courts treat mirror-image SLATs as if the spouses never actually gave anything up — the trusts need genuine, documented differences.
• The couple might divorce. A SLAT’s key feature — beneficiary-spouse access — disappears if that spouse is no longer married to the donor, a real and irreversible risk.
• You need direct, personal control over the gifted assets. Irrevocable means irrevocable — the donor permanently gives up direct ownership and control.

What to actually do

1. Run the Estate Tax Exposure calculator first to confirm your estate is genuinely exposed to estate tax at the margin.
2. Choose assets with high expected appreciation to gift — the freeze benefit scales with growth, not just size.
3. Work with an estate attorney to draft genuinely distinct trust terms if both spouses plan to fund SLATs for each other.
4. Use an independent trustee for distributions to the beneficiary spouse, to avoid undermining the trust’s exclusion from the estate.
5. Revisit the strategy if divorce becomes a realistic possibility — the beneficiary spouse’s access is tied to the marriage continuing.