Pilot Trusts

Pilot Trusts are Trusts set up during the lifetime of the Settlor (the person ‘settling’ property in the Trust) to receive property on the death of the Settlor – such as Pension & Life Assurance payments, Business shares, or a legacy gifted via their Will.

When to use a Pilot Trust

  • To receive payments from a Life Assurance or Pension policy after death – thus ensuring the payment does not fall into an individual beneficiaries estate and become liable to inheritance tax at 40% on their death
  • To receive the shares of a trading business either before or after the settlor’s death, eg before a company sale or to retain the relevant management control while providing for non-company beneficiaries, and to enable the proceeds of sale to sit outside an individual beneficiary’s estate for both disposal and tax planning purposes
  • To receive legacies in the settlor’s lifetime, or via their Will after death, to protect a beneficiary’s inheritance, or receive the legacies of minor children or beneficiaries who would not be capable of managing their own finances, or one who is in a ‘risk situation’, such as being subject to a possible future divorce or bankruptcy

For more information on Pilot Trusts, download the factsheet or contact us