Pilot Trusts

These are discretionary trusts which are set up in advance (often at the same time as a Will is made) to receive money from a Death-in-Service benefit, Pension Fund or from a Will.

They are very flexible Trusts, often used to benefit the whole family. Particular benefits include:

The money/property/investments in the Trust do not belong to any one beneficiary, so the funds
are not subject to inheritance tax when one of the beneficiaries dies;

Pilot Trusts, which do not exceed the Nil Rate Band are particularly tax-efficient. For this reason itis sometimes better to set up more than one Trust to ensure that each one is limited to the NRB;

You can regulate how the Trust is to operate, who will benefit and at what age;

The funds, while they are in the Trust, are protected from divorce claims, creditors, second
marriages and financial abuse of or by the beneficiaries.

Multiple Trusts can be created to make full use of Nil Rate Bands