By Pass Trust

Also known as Credit Shelter Trust, Family Trust, or Non-Marital Trust. This type of trust would typically be established upon your death under the terms of your Living Trust. It is designed to take advantage of the amount that each of us can give away (during life or at death) without incurring gift or estate taxes. If properly structured, the trust would not be subject to estate taxes in your estate or in the estate of your surviving spouse. Thus, the trust property can pass to your children or other beneficiaries free of estate taxes. The trust usually is structured so the surviving spouse can receive income and principal from the trust.