What is a Pilot Trust?

On the Prestige Tax and Trust Services blog this week, we give the answer to a question we’re sure you’re asking: what is a pilot trust?

The Definition of a Pilot Trust

Essentially, a pilot trust is a way to protect the assets that make up your estate, and ensure that they’ll be dealt with according to your wishes, once you pass away.

Once you make a pilot trust, they operate after you’ve passed away to protect against a number of risks to your estate, including, but not limited to; bankruptcy, divorce, remarriage, tax mitigation and vulnerable beneficiaries. Even better, they act to ensure that property is removed from assessments for long term care fees.

The Key Features of a Pilot Trust

This wide ranging remit makes pilot trusts the most flexible of all estate planning tools. That flexibility means that pilot trusts come with a range of features that ensure that your assets are protected effectively after death, including:

  • The ability to enable lifetime discretionary trusts set up in tandem with a will. Find out more about how to make a will in England on the Prestige Tax and Trust Services blog.
  • It allows you to protect your assets with only a nominal sum (usually £10).
  • When capital is less than £1,000 it can be set up with only minimal administration.
  • It allows assets to be fed into the trust during your lifetime, or often, by legacies in your will.
  • Each trust comes with its own nil rate band allowance for the purposes of inheritance tax.
  • It makes assets available to beneficiaries rather than locking them away.
  • It allows for the protection of assets including, but not limited to: cash, property, investments, equities, antiques vintage vehicles etc.

The Benefits of a Pilot Trust

Essentially, pilot trusts are the most diverse tool you have to hand to ensure that your estate is dealt with as you wish once you pass away. They come with many other benefits, which we have blogged about before. Read to discover the benefits of a pilot trust.

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