Advanced Estate Planning Strategies for High-Net-Worth Families

By Alexander Ewert Estate Planning & Wealth Transfer Specialist Published: January 2026

As an estate planning advisor who has spent more than fifteen years helping ultra-high-net-worth families preserve and transfer wealth across generations, I am often asked, “How do we own life insurance and other assets in a way that removes them from the taxable estate while still retaining some practical access to cash values during lifetime?”

The answer almost always lies in one (or a combination) of four powerful irrevocable trust structures:

1. Irrevocable Life Insurance Trusts (ILIT)

2. Spousal Limited Access Trusts (SLAT)

3. Beneficiary Limited Access Trusts (BLAT)

4. Qualified Domestic Ownership Trusts (QDOT) — especially relevant when one spouse is not a U.S. citizen

Below is a concise, practitioner-level overview of each tool, including the real-world planning considerations I discuss with clients every week.

1. Irrevocable Life Insurance Trust (ILIT) – The Classic Estate-Tax-Exclusion Vehicle

An ILIT is the gold standard for keeping large life insurance death benefits completely outside the insured’s taxable estate.

Key advantages • Death benefit is income-tax-free and estate-tax-free to heirs • Policy cash values grow income-tax-deferred inside the trust • Properly structured Crummey withdrawal rights allow annual gifts to qualify for the gift-tax annual exclusion

Common pitfalls I help clients avoid • Forgetting to transfer an existing policy correctly (triggering the three-year pull-back rule under IRC §2035) • Funding the ILIT with a promissory note instead of cash when premiums are high (the IRS has challenged these aggressively) • Naming the insured as trustee or retaining too much control (disqualifying the trust under §§2042 or 2036/2038)

The result: a $20–50 million policy can pay out entirely tax-free, often covering estate taxes on illiquid assets (real estate, operating businesses, etc.).

2. Spousal Limited Access Trust (SLAT) – Adding Lifetime Flexibility

A SLAT is essentially an completed-gift irrevocable trust for the primary benefit of the spouse, with remainder interests to children or other heirs.

Why clients love SLATs right now • The donor spouse can indirectly access trust assets through the donee spouse (distributions for health, education, maintenance, and support — “HEMS” standard) • Cash value life insurance inside the SLAT can be borrowed against or withdrawn by the trustee for the spouse’s benefit • The trust is a completed gift, removing future appreciation from the donor’s estate

Critical timing issue in 2026 With the estate/gift/GST exemption scheduled to sunset from ~$13.6M to ~$7M per person at the end of 2025, many couples are funding SLATs this year while the higher exemption is still available. One-spouse SLATs (only one spouse creates the trust) have become the default because reciprocal SLATs carry IRS scrutiny under the reciprocal trust doctrine.

3. Beneficiary Limited Access Trust (BLAT) – Extending Access to the Next Generation

A BLAT (sometimes called a Beneficiary Controlled Trust or Lifetime Access Trust for descendants) allows children or other non-spouse beneficiaries to serve as trustee of their own sub-trust and make limited distributions to themselves, typically under an ascertainable standard (HEMS) or with distribution committee oversight.

Practical uses I see frequently • Funding a BLAT with a large single-premium life policy so the child can access cash value for business opportunities, home purchases, or education without triggering estate inclusion • Combining with dynasty/GST planning so the policy stays out of the child’s estate as well

Guardrails I always recommend • Independent distribution advisor or trust protector to prevent full “general power of appointment” risk under §2041 • “Hanging powers” or 5×5 powers limited to the greater of $5,000 or 5% annually to avoid estate inclusion

4. Qualified Domestic Ownership Trust (QDOT) – The Non-Citizen Spouse Solution

When one spouse is not a U.S. citizen, the unlimited marital deduction is unavailable unless assets pass to a properly drafted QDOT.

Key QDOT requirements • At least one trustee must be a U.S. citizen or domestic corporation • The trustee must have the power to withhold estate tax on corpus distributions • IRS Form 706-QDT filing and security posting may be required for trusts over $2 million

I often layer a QDOT inside a SLAT or ILIT structure when the surviving spouse is non-citizen, allowing income distributions tax-free while deferring estate tax until the non-citizen spouse dies or becomes a citizen.

Putting the Pieces Together – A Real (Anonymized) Client Example

A 58-year-old entrepreneur with a $45 million estate and a non-U.S.-citizen wife recently implemented the following:

1. $15 million SLAT funded with cash and a new survivorship policy (wife has indirect access)

2. $20 million ILIT for liquidity at the second death

3. Two $10 million BLATs for adult children (each child can access cash value for business ventures)

4. QDOT provisions embedded in case the wife survives and never naturalizes

Total projected estate-tax savings: approximately $18–22 million depending on future law changes.

Final Thoughts from Alexander Ewert

These four trust structures—ILITs, SLATs, BLATs, and QDOTs—represent some of the most powerful (and still fully IRS-compliant) tools available in 2026. When designed and funded correctly before potential legislative changes, they can remove tens or hundreds of millions from the taxable estate while preserving meaningful lifetime access for spouses and descendants.

Every situation is unique. If you or your advisors would like to explore whether one or more of these strategies fits your family’s goals, please reach out. I’m always happy to discuss.

Alexander Ewert Wealth Transfer & Estate Planning Advisor alex@trueshieldins.com

This article is for general educational purposes only and does not constitute legal, tax, or investment advice. Please consult qualified professionals for advice specific to your circumstances.