A trust is set up during the lifetime of a person to distribute money or property to another person or organization (as distinguished from a person who transfers money or property after death. An Inter Vivos Trust is created by a living person for the benefit of another person. Also known as a living trust, this trust has a duration that is determined at the trust’s creation and can entail the distribution of assets to the beneficiary during or after the trustor’s lifetime.
An inter-vivos trust is a term used in estate planning for a fiduciary relationship created during the lifetime of the trustor. An inter vivos trust is also known as a living trust, this trust has a duration that is determined at the time the trust is established and can entail the distribution of assets to the beneficiary during or after the trustor’s lifetime. The opposite of an inter-vivos trust is a testamentary trust, which goes into effect upon the death of the trustor.
How an Inter-Vivos Trust Works
An inter vivos trust is typically established to hold assets for the benefit of a party called the trust beneficiaries. A trustee is typically assigned to manage those assets and to ensure that the trust agreement is followed, which would include making sure the assets are distributed to the named beneficiaries.
There are two categories of trusts that a living trust can fall under; revocable or irrevocable. An inter-vivos trust is a living trust since it serves the purpose of allowing the owner or trustor to use the assets and benefit from the trust during the trustor’s lifetime. Once the trustor passes away, the assets would be distributed by the trustee to the beneficiaries. While living, the trustor, or trustors in the case of a married couple, can be the trustee, managing the assets until they are no longer able, at which time a named backup trustee assumes the duties.
Establishing an Inter-Vivos Trust
In establishing an inter trust, the grantor names the trust parties, which include the grantors, typically the husband and wife; the beneficiaries; and the trustee. Sometimes, the spouses are named as trustees. However, a contingent trustee should be named in the event both spouses die.
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