Definition
An inter vivos trust, also known as a living trust, is a legal arrangement where property and assets are placed into a trust to be managed during the grantor’s (the trust creator’s) lifetime. Unlike testamentary trusts, which become effective upon the grantor’s death, inter vivos trusts are effective immediately on the creation and funding of the trust.
Meaning
The term “inter vivos” is Latin, meaning “between the living.” This type of trust allows the grantor to control and improve the management of their own assets during their lifetime, often providing better flexibility and efficiency in estate planning.
Etymology
The term “inter vivos” originates from Latin. The word “inter” translates to “between” and “vivos” translates to “the living.”
Background
Inter vivos trusts became increasingly popular as tools for estate planning due to their ability to facilitate the seamless transfer of assets, avoid probate proceedings, and offer privacy regarding the management of one’s estate.
Key Takeaways
- Functionality: Facilitates control and management of assets during the grantor’s lifetime.
- Flexibility: Can be revocable or irrevocable.
- Probate Avoidance: Assets in an inter vivos trust typically avoid probate procedures.
- Privacy: Unlike wills, trusts are generally private documents.
- Tax Implications: Depending on its structure, it offers various tax implications and potential benefits.
Differences and Similarities:
- Testamentary Trusts: Created as part of a will and effective only upon the grantor’s death, in contrast to inter vivos trusts which are immediately effective.
- Revocable Trusts: Often, inter vivos trusts are revocable, meaning the grantor can alter or terminate the trust. In contrast, some inter vivos trusts can be irrevocable.
Similarities:
- Both serve as estate planning tools that can help in managing and distributing assets.
- Both involve legal transfer of asset ownership to the trust.
Synonyms
- Living Trust
Antonyms
- Testamentary Trust
- After-Death Trust
Related Terms with Definitions:
- Trustee: The individual or entity responsible for managing the trust’s assets.
- Beneficiary: The individual or entity designated to receive benefits from the trust.
- Grantor: The person who creates the trust and transfers assets into it.
- Revocable Trust: A trust that can be altered or terminated by the grantor during their lifetime.
- Irrevocable Trust: A trust that, once established, cannot be altered or terminated by the grantor.
Frequently Asked Questions:
Q: What immediate benefits does an inter vivos trust offer? A: Immediate control and management of assets, ability to avoid probate, privacy, and potential tax advantages.
Q: Can an inter vivos trust be changed once it’s established? A: If it is revocable, it can be changed or terminated at any time by the grantor. If it’s irrevocable, it generally cannot be altered without beneficiary consent and court intervention.
Exciting Facts:
- Thomas Jefferson used an inter vivos trust to ensure the survival of his Monticello estate.
Quotations:
- “The time is always right to plan your estate, but it pays to act while you have the mental and physical ability to do so.” – Jonathan Hart
Proverbs:
- “Dig your well before you’re thirsty.” – Estate planning wisdom
Humor:
- “My trust can be a little untrusting, but better late than probate!”
Related Government Regulations
Each country and jurisdiction has specific rules governing the establishment and treatment of trusts. In the United States, trust laws can vary significantly from state to state under the Uniform Trust Code (UTC) and other local regulations.
Literature and Other Sources for Further Study:
- “The Living Will and Trust” by Henry W. Abts III
- “Make Your Own Living Trust” by Denis Clifford
- “Understanding Living Trusts: How You Can Avoid Probate, Keep Control, Save Taxes, and Enjoy Peace of Mind” by Vickie Schumacher
Quizzes
In the dynamic world of estate planning, an inter vivos trust stands out as a versatile and powerful tool! Adieu with a chuckle and remember: “Why put off planning for the future when you can entrust it to living today?”
Jonathan Hart
