SLG LiveSite Portlet

Bypass Trust

Overview

We have designed a simple way in which lump sum death benefits payable from a Self Invested Personal Pension can be paid to a trust instead of being paid directly to an individual. The Bypass Trust provides flexibility, asset protection and potential Inheritance Tax (IHT) benefits.

Establishing and nominating the Bypass Trust

Your clients need to complete two documents:

Bypass Trust
Instruction for payments for death benefits


More on SIPP

Benefits for your client’s family

  • Asset protection – since any death benefits held in the trust would not become part of a beneficiary’s estate they will be more protected if that individual divorces or becomes bankrupt
  • IHT saving – the trust’s assets don’t form part of the estate of the beneficiaries so on their death they won’t increase their IHT liability
  • Control – pension scheme trustees can exercise their discretion when deciding who to make death benefits payable to. The client can give a binding instruction to the scheme trustees to pay any lump sum death benefits to the Bypass Trust
  • Flexibility – If lump sum death benefits are paid into the Bypass Trust, the Trustees can decide who should receive the benefits, based on the beneficiaries’ circumstances at that time

Benefits for your business

  • Creates other business opportunities – by discussing the Bypass Trust, you are giving more comprehensive advice to your client and can start a wider estate planning conversation, which could lead to other business opportunities
  • Potential SIPP sales – the Bypass Trust provides a reason for you to contact clients who are considering taking out a SIPP
  • Potential to develop professional connections – through introducing work to a law firm where a loan is being considered or capital is being appointed to a beneficiary
SLG LiveSite Portlet
SLG LiveSite Portlet
SLG LiveSite Portlet

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