Have you considered the financial benefits of a Pilot Trust?

The funds or property held in a Pilot Trust do not belong to any one beneficiary so they are not subject to inheritance tax when one of the beneficiaries dies and funds may be loaned to beneficiaries during their lifetime thus reducing or avoiding future trust administration costs.

A pilot trust is set up during the lifetime of the settlor ready to receive funds and/or property upon their death from a legacy in their Will, pension fund or death-in-service benefit. Also known as bypass trusts they are normally discretionary and can be created by attaching a £10 note to the trust document. The trustees may be a professional organisation such as a trust corporation or up to four trusted individuals, one of whom may be a spouse or civil partner.

The settlor may leave a statement of wishes with the trustees explaining why the trust was created and how the beneficiaries should be treated.

A pilot trust is useful when the settlor wishes to benefit different members of the family, future generations and/or children from a previous marriage. The trust may also offer protection from creditors, divorce claims, future care costs or financial abuse by or of beneficiaries.

Unmarried couples may find pilot trusts useful. As there is no spousal exemption to utilise they could leave their nil rate band to the trust with the residue to a cohabitee with a significant inheritance tax saving.

If death-in-service benefits and pension funds pass into pilot trusts they will not form part of the estate of the deceased, they are readily available without the need for probate and there could be considerable tax savings. Multiple trusts may also be created, (as long as they are not formed on the same day) and if each fund is limited to £325,000 (the present IHT threshold) there will be no 10 yearly or exit charges (taxes).

Pilot Trusts are relatively easy to set up and can be
established separately or at the same time as the
testator's Will is prepared for as little as £230 + VAT
and £100 + VAT for each additional trust (for the same
person) if required.

If you are interested in setting up a Pilot Trust
or you require further details please call
Steele Rose on 01722 410009 or complete the
form or the right and click on the 'Send' button
below and we shall call you back as soon as
possible.

Steele Rose & Co Limited.
Registered Office: The Parsonage, Stratford sub Castle,
Salisbury SP1 3LH.
Registered in England No. 3392519 - VAT No. 750 5846 22
Regional Offices throughout England and Wales 
Tel: 01722 410009 - Fax: 01722 411666
email: legalservices@willwriter.org.uk