When Dolly Parton died on August 25, the property records left behind showed a compound outside Nashville that had moved through something called a spousal trust. Spousal trusts are not a celebrity instrument. They are one of the most-used tools in high-net-worth planning, and Florida changed the rules governing them in 2022 in a way that a lot of existing documents never caught up to.

If you signed a spousal lifetime access trust before July 2022, the amendment is a reason to pull the document out this quarter.

What a spousal lifetime access trust actually does

A spousal lifetime access trust, or SLAT, is an irrevocable trust that one spouse creates for the benefit of the other. The grantor spouse transfers assets in permanently. Those transfers are completed gifts, which means the grantor applies lifetime federal gift and estate tax exemption to them rather than writing a check to the IRS. In 2026 that exemption sits at $15 million per individual and $30 million for a married couple.

The assets leave the grantor's taxable estate, and so does everything they earn from that day forward. Move $10 million into a SLAT, let it grow to $25 million over fifteen years, and the $15 million of appreciation never sees the 40% federal estate tax.

Meanwhile the household has not actually gone without. The beneficiary spouse can receive distributions for health, education, maintenance, and support. Money that reaches one spouse in a functioning marriage reaches the household.

There is a second benefit that matters more to the Florida business owners and real estate investors this firm works with. Because the trust is irrevocable and the grantor holds no beneficial interest, the assets generally sit beyond the reach of the grantor's future personal creditors. A physician facing a malpractice claim years later, or a developer who signed lender guarantees, is not looking at trust assets that belong to somebody else.

The structural weakness everyone warned about

For years, the standard caution about SLATs was the death-or-divorce problem, and it was a real one.

Florida's general rule on self-settled trusts is unforgiving. Under Fla. Stat. § 736.0505(1)(b), a creditor of the settlor of an irrevocable trust "may reach the maximum amount that can be distributed to or for the settlor's benefit." Put yourself in your own trust as a beneficiary and your creditors follow you in.

That created a bind. The SLAT works because the grantor is not a beneficiary. But if the beneficiary spouse dies first, the household's access to the trust dies with them. The obvious fix — add the grantor as a beneficiary after the spouse's death — was the one thing that would convert a protected third-party trust into an exposed self-settled one.

Practitioners worked around it with contingent provisions, floating spouse clauses, and life insurance on the beneficiary spouse. The workarounds were awkward, and plenty of documents simply did not address it.

What Florida changed in 2022

Chapter 2022-101, Laws of Florida, added subsection (3) to § 736.0505. For a qualifying trust, the statute provides that the assets:

Read that carefully, because the drafting is elegant. Florida did not carve out an exception to the self-settled rule. It changed who the law treats as having funded the trust. Once the beneficiary spouse dies, the contribution is deemed to have come from that spouse. The surviving grantor becomes, in the eyes of the statute, the beneficiary of somebody else's trust. Third-party trusts have always been protected in Florida. Now the SLAT stays one.

The same subsection extends the treatment to marital deduction trusts under IRC § 2523(e) and QTIP trusts under § 2523(f), and to a successor trust "to the extent that the assets in the other trust are attributable to" the original.

The three conditions, and why they are not negotiable

Section 736.0505(3)(a)3. applies only to an irrevocable trust in which all three of the following are true:

1. The settlor's spouse is a beneficiary for the lifetime of the settlor's spouse. Not for a term of years. Not until a defined event. For life.
2. At no time during the lifetime of the settlor's spouse is the settlor a beneficiary. This one is absolute. A grantor who is a permissible beneficiary even in some remote contingency during the spouse's life falls outside the statute entirely.
3. Transfers to the trust by the settlor are completed gifts under IRC § 2511. An incomplete gift does not qualify. This ties the creditor treatment to the tax treatment, so a trust drafted to be deliberately incomplete for gift tax purposes gives up the § 736.0505(3) protection.

Fail any one and the whole subsection is unavailable.

What the statute does not do

It does not add the grantor as a beneficiary. This is the most common misreading. Section 736.0505(3) governs the consequence of the grantor becoming a beneficiary after the spouse dies. It does not create the interest. If the trust instrument has no provision naming the grantor as a post-death beneficiary, there is nothing for the statute to operate on, and the surviving grantor has no access at all.

This is exactly why a pre-2022 document is worth reviewing. It may have been drafted to avoid a problem the Legislature has since solved, and the cautious drafting may now be leaving value on the table.

It does not override fraudulent transfer law. Subsection (3) opens with the words "Subject to the provisions of s. 726.105." Florida's fraudulent transfer statute governs regardless. Fund a SLAT while a claim is pending, or while insolvent, and the transfer is reachable no matter how well the trust is drafted. The solvency analysis comes before the funding, not after.

It does not address divorce. The 2022 amendment speaks only to the death of the settlor's spouse. In a dissolution, the beneficiary spouse becomes an adverse party, the grantor's practical access ends, and if the trust is a grantor trust for income tax purposes the grantor may keep paying income tax on assets that now benefit a former spouse. Florida's equitable distribution statute, Fla. Stat. § 61.075, also reaches transfers made in contemplation of divorce.

A Florida example

Consider a married Orlando orthopedic surgeon with a $22 million net worth, most of it in a practice interest and a portfolio of medical office buildings held through LLCs. She funds a SLAT for her husband with $8 million of the real estate LLC interests, using part of her exemption. The trust is drafted so that if her husband predeceases her, she joins the beneficiary class.

Ten years on, the real estate has doubled. That $8 million of growth sits outside her estate. A malpractice judgment in year eight does not reach the trust, because she is not a beneficiary while her husband is alive. If her husband dies in year twelve and she becomes a beneficiary, § 736.0505(3) treats the assets as his contribution, and her own later creditors still cannot reach them.

Take away the post-death provision and the last sentence stops being true. She would have the statute's protection available and no interest for it to protect.

Frequently asked questions

What to do with this

If you have an existing SLAT signed before July 2022, have it read against the three conditions in § 736.0505(3) and check whether it contains a post-death provision for the grantor. If you are considering one, the conditions should shape the drafting from the first draft rather than being retrofitted.

Schedule a consultation with Aspire Legal Solutions or call 866.725.2818.