An Interest in Possession Trust is a type of trust that is established outside of a will, but referenced in the will. It is usually recommended for married couples with an estate that exceeds the 2 Nil Rate Bands. The trust is created 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, settled by a will and thus falls under the 'Immediate Post Death Interest' in the Inheritance Tax (IHT) Act of 1984. The value of the Interest in Possession Trust will be accountable in the Interest in Possession estate for the life tenant's IHT. However, it will be protected from their remarriage, divorce, creditor claims, means testing for the disabled beneficiary, and care fees.

By establishing a Interest in Possession Trust, married couples can ensure that their assets are protected from a variety of situations that could reduce their estate or lead to financial difficulties for their beneficiaries. It can also help reduce the amount of IHT owed on the estate, making it a useful tool for estate planning.