When it comes to protecting your family’s future, having a solid plan in place can make all the difference. A bypass trust offers an effective way to preserve wealth and provide financial security for your loved ones. This trust can help ensure your assets are distributed according to your wishes while minimizing unnecessary taxes. Whether you’re looking to safeguard your family’s inheritance or maintain control over how your estate is managed, a bypass trust can offer peace of mind and long-term benefits.

How a Bypass Trust Works

A bypass trust, often created as part of a couple’s estate plan, helps reduce estate taxes and ensures assets are preserved for heirs. When one spouse passes away, the trust is funded with part of the deceased spouse’s estate up to the federal estate tax exemption limit. These assets are then held in the trust, managed according to its terms, and protected from estate taxes upon the second spouse’s death.

The surviving spouse can still benefit from the trust during their lifetime. For example, they might receive the income generated by the trust or have access to the principal for specific needs, such as medical expenses or education costs. However, because the assets remain outside their taxable estate, they are not subject to additional estate taxes later.

This structure not only safeguards wealth for future generations but also provides flexibility and control for surviving family members.

Key Benefits of a Bypass Trust

A bypass trust offers several benefits that can help protect your estate and provide for your loved ones. Here are some key advantages:  

  • Tax reduction: By keeping certain assets out of the surviving spouse’s taxable estate, a bypass trust helps minimize or eliminate estate taxes, allowing more of your wealth to reach your heirs.  
  • Asset protection: Assets in the trust are shielded from creditors and lawsuits, ensuring they remain secure for your family.  
  • Controlled distribution: You can specify how and when your assets are distributed, providing structure and ensuring your wishes are honored.  
  • Family security: A bypass trust provides ongoing financial support for the surviving spouse while preserving wealth for future generations.  

Is a Bypass Trust Right for You?

Deciding whether a bypass trust is right for you depends on your financial situation, family goals, and estate planning needs. Couples with significant assets—especially those exceeding the federal estate tax exemption—can benefit from the tax-saving features of a bypass trust. By preserving more of your estate, you can ensure your loved ones receive the support and security you intend.  

A bypass trust may also be a good option if you’re concerned about protecting assets from creditors or ensuring they are distributed according to your wishes. This type of trust offers flexibility, allowing the surviving spouse to access income or principal while keeping the trust assets separate from their taxable estate.  

If you want to maintain control over your estate and provide for future generations, a bypass trust could be a strategic choice. We can help determine if it fits your needs. 

How We Can Help You Establish a Bypass Trust

At the Law Office of Carey Thompson, we understand that every family has unique goals and concerns. When creating a bypass trust, we’ll take the time to get to know your situation and craft a plan that aligns with your needs. Our team will guide you through the process, ensuring your trust is set up correctly and provides the protections you want for your loved ones. Let’s work together to secure your family’s future. Contact us today to schedule a consultation and get started.