When the pension freedoms were announced back in March 2014, the appeal of discretionary bypass trusts, commonly referred to as spousal bypass trusts, was dramatically reduced. The new rules meant you could leave your defined contribution pension to dependants other than just your spouse and they could draw an income. So why would anyone still want to use a bypass trust? That’s the question I explore in this video, looking at typical scenarios when a spousal bypass trust may be helpful. Other videos you might like: Tax and other charges of a spousal or discretionary bypass trust for defined contribution pensions – Thanks for checking out my You Tube channel - I’m Justin King and my aim is to help people to live successful lives. That often involves understanding your money. If you enjoy this video, please press the like button to help more people like you find my channel. If you're planning your retirement and want to make the best use of your wealth to provide for your family throughout retirement and beyond, or work out how best to pay for a loved one’s care, I may be able to help you. As a Chartered Financial Planner at boutique retirement planning practice, MFP Wealth Management, I help successful people retire with complete financial confidence. To explore whether I could help you, get in touch at Connect with me: On Twitter: On LinkedIn: Or check out my podcast: This video is for information and entertainment only. Nothing on this channel constitutes financial advice. Please do not make any decisions based on the contents of my videos; seek professional independent financial advice first!...(read more)
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Decisions about death and risk management are rarely pleasant, but they are crucial for ensuring the financial security of your loved ones. After all, we all hope to provide some form of financial support if we pass away before our spouse. It is no wonder, then, that many choose to invest in pension plans or other forms of retirement savings. However, this raises the question of what happens to these valuable assets if we pass away. That is where spousal or discretionary bypass trusts come in. A spousal bypass trust, also known as a credit shelter trust, is a type of trust designed to prevent assets from being taken away from the surviving spouse by creditors or other family members. This trust is often used to protect the beneficiary from estate taxes, making it an effective way to distribute pension benefits upon death. Spousal bypass trusts are created by establishing two separate trusts - one for the surviving spouse and one for the estate. The estate trust contains a certain amount of your assets up to a predefined value, which will be held in trust for the beneficiaries of the estate. Discretionary bypass trusts, on the other hand, are used to provide flexibility in the distribution of pension benefits for your heirs. Their main use is in situations where the beneficiaries cannot easily be determined or where you may want to leave assets to certain people that do not qualify as a "spouse." They offer more flexibility, allowing the trustee to distribute assets on a discretionary or arbitrary basis to fit the specific needs of beneficiaries on a case-per-case basis. Say you're in a situation where, upon your passing, you would like your spouse to be able to benefit from your pension plan but are worried that creditors or other family members could take those assets away. Or perhaps there are familial relationships you want to take care of after your passing that don't fit the traditional definition of a spouse, such as your siblings or other relatives. In these cases, creating a spousal or discretionary bypass trust may be a prudent option to ensure that assets go to the right people in the event of your death. In conclusion, if you want to be sure that your pension plan or other retirement savings go to the people you want them to go to, establishing spousal or discretionary bypass trusts could be the answer. While creating these types of trusts can be a complex process, consulting with an experienced estate planning attorney can help you make informed decisions and ensure your loved ones' financial security after your passing. https://inflationprotection.org/why-to-choose-a-spousal-or-discretionary-bypass-trust-for-pension-benefits-when-you-die/?feed_id=78856&_unique_id=6413ecead2642 #Inflation #Retirement #GoldIRA #Wealth #Investing #benefitsofaspousalbypasstrust #howdoesaspousalbypasstrustwork #justinking #reasonsforusingaspousalbypasstrust #retirementplanning #SpousalIRA #benefitsofaspousalbypasstrust #howdoesaspousalbypasstrustwork #justinking #reasonsforusingaspousalbypasstrust #retirementplanning
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