Inter Vivos Trust Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Inter Vivos Trust, written in plain English, along with examples of how it is used.
What is Inter Vivos Trust?
It is refered to as a living trust which is formed and existing already when the person/trustor is living. It is different from the trust created by the will as in that the trust is created after the trustor has died and as per his will.
History and Meaning of Inter Vivos Trust
Inter Vivos Trust, also known as a living trust, has its roots in English trust law, dating back to the Middle Ages. The trust was created as a way of separating legal ownership and control of property for the benefit of the beneficiaries. The trustor or the creator of the trust transfers assets to the trust, and during the trustor's lifetime, the trust is managed by a trustee, who is responsible for managing the assets of the trust according to the trust terms to benefit the trust's beneficiaries.
The trust is different from other types of trusts as it is created during the trustor's lifetime, as opposed to a will trust, which comes into being after the death of the trustor. The trustor can either be the trustee or assign a trustee to manage the trust assets.
Examples of Inter Vivos Trust
Examples of inter vivos trusts include revocable and irrevocable trusts, charitable trusts, special needs trusts, and spendthrift trusts.
A revocable trust allows the trustor to manage and make changes to the trust during their lifetime. An irrevocable trust cannot be modified or revoked once the trustor creates it.
A charitable trust allows the trustor to donate assets to benefit a charitable organization. A special needs trust is created for beneficiaries who have a disability and require ongoing management of their assets to ensure their medical and personal needs are met.
Lastly, a spendthrift trust is created to protect beneficiaries who cannot manage their finances and from creditors who may attempt to seize the trust assets to settle their debts.
Legal Terms Similar to Inter Vivos Trust
Terms related to inter vivos trusts include testamentary trusts, trusts for minors, and bare trusts.
A testamentary trust is different from an inter vivos trust because it is created as a result of a will and comes into being after the trustor's death. Trusts for minors are created for beneficiaries who are not yet adults and will only receive their assets once they reach the age of majority.
A bare trust is a simple form of trust in which the trustee holds legal title to the assets for the beneficiaries, but has no control over the assets and must follow the trust terms.