Missed opportunities

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Neil MacGillivray outlines the value of by-pass trusts and explains why poor drafting of new legislation has resulted in lost opportunities

The Perpetuities and Accumulation Act 2009 (PAA 2009) was supposed to not only extend the period of time a trust under English law can exist but also clarify existing law. In relation to the use of by-pass trust arrangements put in place to receive pension lump sum death benefits, the new legislation would appear to fall well short of its objectives. By way of background by-pass trusts are commonly used as a means of controlling who, how and when individuals receive any pension lump sum death benefits. For example, if a member of a pension scheme had children from a previous marriage, h...

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