INTER VIVOS TRUST
Back to GlossaryDefinition
A trust created during a lifetime and refers to trusts created during a person's lifetime as compared to testamentary trusts which are created in a will and come into effect on the testator's / testatrix's death.
Summary
An Inter Vivos Trust is a legal arrangement created while a person is still alive, where they transfer ownership of assets to a trustee who manages them for the benefit of designated beneficiaries. The term 'inter vivos' is Latin meaning 'between the living.' This type of trust becomes effective immediately upon creation, unlike testamentary trusts which only take effect after death through a will. Inter vivos trusts are also commonly called 'living trusts' and can be either revocable (can be changed or canceled) or irrevocable (cannot be easily modified once established).
Usage Context
Understanding inter vivos trusts is crucial when studying estate planning strategies, trust law, tax planning, and wealth transfer mechanisms. This concept is fundamental when comparing different methods of asset management and inheritance planning.
Common Confusions
- Thinking all inter vivos trusts are revocable when some are irrevocable
- Confusing inter vivos trusts with testamentary trusts in terms of when they become effective
- Believing that creating an inter vivos trust means completely losing control of assets
- Assuming inter vivos trusts automatically avoid all taxes and probate
- Mixing up the roles of grantor, trustee, and beneficiary in trust arrangements
