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| THE BY-PASS TRUST The Bypass Trust is used by married people to guarantee that the two lifetime exemptions are properly used. Under current law, it can save as much as $235,000.00 in federal estate taxes. The Bypass Trust is not created when you draw up your estate plan. Rather, it is authorized. In your will or in your living trust, you authorize your executor or trustee to create the Bypass Trust at your death. In addition, you may specify certain criteria regarding your Bypass Trust. Each spouse will need to authorize the Bypass Trust in his or her will or Living Revocable Trust (LRT). Your LRT might say words to this effect, "If I am the first to die, pay all the tax that will ever be due on my estate." If your half of the estate is $600,000.00 or less, there will be no tax due. But, you will have paid "all that is due" and the Bypass Trust can never be taxed again. The Bypass Trust is designed to benefit the spouse for his or her life. It can be designed to give the spouse. 1. All income. 2. Five percent or five thousand (whichever is greater) annually. 3. Anything needed for the spouse's Health, Education, Maintenance and Support. At the end of the second spouse's life, the Bypass can go to the persons or trusts that were originally named by the first spouse to die. So, the beauty of the Bypass Trust is that it can benefit both spouse (as life beneficiary) and other persons or causes (as the ultimate beneficiary). One does not need to choose between spouse and others. Both can receive appropriate benefits. To leave assets to our institution through the Bypass Trust, you may name your spouse to receive lifetime benefits ... and ... at his or her death, leave some percentage or some amount to "The Foundation". |
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