Bypass Trust

Bypass Trust

Bypass Trust means:
an agreement allowing parents to pass assets on to their children to reduce estate taxes. The trust must be made irrevocable, meaning that the terms can never be changed. Assets put into such a trust usually exceed the amount that children and other heirs can receive tax free at a parent's death. This amount is $600,000 for 1987 and thereafter. Parents can arrange to receive income from the assets during their lifetimes and may be able to touch the principal in case of need. One variation of a bypass trust is the qualified terminable interest property trust.

See Inheritance Tax and Inheritance Tax.


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