A Bypass Trust is a trust designed to hold assets owned by the deceased spouse having a total value equal to (or not exceeding) the Tax Free Amount. The surviving spouse or any other qualified person or entity may serve as trustee of a correctly drafted Bypass Trust. Per the terms of the typical Bypass Trust, distributions can be made to the surviving spouse to provide for his or her health, support and maintenance in accordance with his or her accustomed standard of living. A Bypass Trust can be drafted to allow distributions to be made to children and other descendants as "secondary" beneficiaries while the surviving spouse is living. Those secondary beneficiaries are often in lower tax brackets than the trust itself and the surviving spouse. Thus, including a power to make distributions from the Bypass Trust to children and grandchildren sets up the possibility of trust income being taxed at very low rates. When trust income is distributed out of the trust to a permissible beneficiary, the beneficiary pays income tax on the distributed income, not the trust. The surviving spouse is sometimes given a testamentary "power of appointment" (described below) over the Bypass Trust. In spite of the fact that the surviving spouse has use of the Bypass Trust assets during his/her lifetime (and may be given control over the disposition of the Bypass Trust assets at death through a testamentary "limited" power of appointment), the assets in the Bypass Trust should not be included in the surviving spouse's estate upon his/her death. In this way, the Bypass Trust assets "bypass" estate taxes on both spouses' deaths. Note that the Bypass Trust assets avoid estate taxes on the death of the surviving spouse no matter what the trust assets are worth at that time (i.e., the value of the Bypass Trust can exceed the Tax Free Amount when the surviving spouse dies and still not incur estate taxes).