Bypass Trust
Updated: 29 February 2024
What Does Bypass Trust Mean?
A bypass trust is an estate planning tool designed to increase the amount of assets that couples can pass on to their beneficiaries after their deaths. Bypass trusts allow this by being taxed significantly less than normal assets.
A bypass trust can be established as an alternative to a life insurance trust.
Insuranceopedia Explains Bypass Trust
Bypass trusts are created by couples, and the trust splits into two trusts when one partner dies. One of these trusts is entirely exempt from taxation. For people with large estates, these tax savings could amount to hundreds of thousands or even millions of dollars.
Bypass trusts are often prepared by lawyers, since they are not valid unless properly prepared.
Related Definitions
Related Terms
Related Articles
Insurance Self-Service Portal: The Future of Customer Experience
Blockchain’s Impact on Transforming the Insurance Landscape
What Every College Student Should Know About Renters Insurance
Guidance for Nurses: Five Essential HIPAA Compliance Tips
Insuring Your Financial Future: the Crucial Role of Accounting in Insurance
Related Reading
Revealing the Most And Least Popular U.S. Insurance Companies
What Students Need to Know About Insurance Coverage During Internships
A Roadmap for Students Interested in the Insurance Industry
Strong Identity Verification in the Insurance Sector
How to Avoid Online Insurance Scams
How to Get Into the Insurance Industry With a Finance Degree