Bypass trust

From Wikipedia, the free encyclopedia

The law of wills and trusts
Part of the common law series
Inheritance
Intestacy  · Testator  · Probate
Power of appointment
Simultaneous death  · Slayer rule
Disclaimer of interest
Types of will
Holographic will  · Will contract
Living will
Joint wills and mutual wills
Parts of a will
Codicil  · Attestation clause
Incorporation by reference
Residuary clause
Problems of property disposition
Lapse and anti-lapse
Ademption  · Abatement
Acts of independent significance
Elective share  · Pretermitted heir
Contesting a will
Testamentary capacity
Undue influence
Types of Trusts
Express trust  · Asset-protection trust
Accumulation and maintenance trust
Interest in possession trust  · Bare trust
Protective trust  · Spendthrift trust
Life insurance trust  · Remainder trust
Life interest trust  · Reversionary interest trust
Charitable trust  · Honorary trust
Resulting trust  · Constructive trust
Special needs trust: (general)/(U.S.)
Doctrines governing trusts
Pour-over will  · Cy pres doctrine
Other areas of the common law
Contract law  · Tort law  · Property law
Criminal law  · Evidence

A bypass trust is typically created as part of an A/B Living trust estate plan after the death of the first spouse to die.

The bypass trust receives property as specified in the trust document - the bypass trust may receive all of the propery of the decedent spouse, or half of the spouses' co-owned property, or it may receive enough property to fully utilize the decedent's estate tax exclusion.

The bypass trust is typically created to achieve one or more of the following goals:

• To maximize the use of the decedent's estate tax exclusion amount, in order to minimize estate tax upon the death of the surviving spouse
• To ensure that the decedent spouse's property will be disposed of in accordance with the decedent's wishes, even if the surviving spouse remarries or chooses to adopt a different estate plan for the surviving spouse's assets.