The Family Interest in Possession Trust is a type of 'Pilot Trust' that is established outside of the Will, but is referenced in the Will and usually not funded until after death. It is typically recommended for use by married couples with an estate that exceeds the value of two Nil Rate Bands. The Family Interest in Possession Trust is designed to receive the excess or residue of the deceased's estate over and above the Nil Rate Band.

This type of trust acts as an Interest in Possession Trust as it is settled by a Will and thus falls under the 'Immediate Post Death Interest' in the IHT Act 1984. The value in the Interest in Possession Trust will be accountable in the Interest in Possession estate for IHT purposes. However, it will be protected from the beneficiary's remarriage, divorce, creditor claims, means testing for disabled beneficiaries, and care fees.