Main Feature of the By-Pass or Pilot Trust
A by-pass trust is a simple, irrevocable discretionary trust which is used as a means of holding lump sum death in service payments or other insurance payments to ring-fence them for future generations and provide potential IHT savings in the future.
The Trust can be set up at any time provided that one is in good health.
The trust is discretionary which means that the trustees can decide who benefits and when.
Possible beneficiaries are pre-defined in the trust deed to include typical family members.
The trust member can amend these to include or exclude anyone either at the outset of the trust or at a later date.
Trustees have wide investment powers so they can invest trust monies in a wide range of investments.
The Member is a Trustee during his/her lifetime.
The member has the power to appoint and remove trustees during his/her lifetime.
The trust cannot last indefinitely however; the By-Pass Trust has been drafted to ensure that the trust can run for a few generations after the member’s death.
A really flexible trust with many uses.