bypass trust


A bypass trust is a tax--minimizing estate planning arrangement for spouses.  During life, the couple transfers ownership of property into two trusts.  At the death of the first spouse, some of the property goes to one trust (Trust A) for the maintenance of the surviving spouse.  The surviving spouse will use this money to live off of.  The remainder of the property goes into the second trust (Trust B).  The surviving spouse will have limited access to the property in Trust B, but this property will be passed on to the beneficiaries (most often, the couples children or heirs) with minimized tax consequences (the taxes will be less then if the property was passed through the estate, or given as a gift during the lifetime of the couple.
 

See AB Trust.

 

 

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