Legal News | 30.07.20

Bypass Trusts

In April 2015, the Government introduced “pension freedoms” allowing people to take as much of their personal pension pot as they liked in one go (subject to certain restrictions) and to nominate those who would benefit from the pension after their death.  Many people thought this change also spelled the end of the spousal bypass trust. The bypass trust arrangement sees the pension pot pass into a trust following your death to be dealt with thereafter by your chosen trustees. However, the bypass trust arrangement might still be the right option for you as it provides an element of control over the payment of pension death benefits after your death.

This might be appealing in a number of situations, whether you are looking to benefit children from a previous marriage in the longer term or you are worried that a potential beneficiary is not ready to have full control over a lump sum. Likewise, if a beneficiary is going through bankruptcy or divorce, the funds held in the bypass trust will not form part of their estate.

There will be tax implications to consider with bypass trusts and we would be happy to discuss these further with you. If you would like to speak to a member of our team about creating a bypass trust, please contact us on 01380 733300 or email wealth@wansbroughs.com.