Bypass trust

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The Law of Wills, Trusts and Inheritance
Part of the common law series
Wills
Wills  · Holographic will
Joint wills and mutual wills  · Will contract
Codicils
Parts of a Will
Attestation clause  · Residuary clause
Incorporation by reference
Contesting a Will
Testamentary capacity  · Undue influence
Insane delusion  · Fraud
Problems of property disposition
Lapse and anti-lapse
Ademption  · Abatement
Acts of independent significance
Elective share  · Pretermitted heir
Trusts
The Law of Trusts
Generic Terms:
Express trust  · Constructive trust
Resulting trust
Common Types of Trust:
Bare trust · Discretionary trust
Accumulation and Maintenance trust
Interest in Possession trust
Charitable trust
Purpose trust
Other Specific Types of Trust:
Protective trust  · Spendthrift trust
Life insurance trust  · Remainder trust
Life interest trust  · Reversionary interest trust
Honorary trust  · Asset-protection trust
Special needs trust: (general)/(U.S.)
Doctrines governing trusts
Pour-over will  · Cy pres doctrine
Other related topics
Living Wills (advance directives)
Inheritance
Intestacy  · Testator  · Probate
Power of appointment
Simultaneous death  · Slayer rule
Disclaimer of interest
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.