An inter vivos trust is a key part of many modern estate plans. Also known as living trusts, or revocable living trusts, inter vivos trusts afford significant benefits and protections for those who create them. Using an inter vivos trust, and making sure it works in conjunction with the rest of your estate planning devices, is something your attorney will explain how to do in detail. Until you speak to your lawyer about these trusts, however, here are some questions with which you should be familiar.
What is an inter vivos trust?
An inter vivos trust is a specific kind of trust people create primarily to mitigate the effect that the probate process has on their estate. To understand why this is, we first need to understand what a trust is.
Trusts are a kind of legal relationship between certain property and certain people. However, it might be easier to understand trusts by viewing them as legal entities, much like corporations. A corporation can own property independent of the people who create it. So too can a trust. When you create a trust, you create an entity that can own property, and which can continue to do so even after you die.
The term ‘inter vivos’ means ‘between the living’ in Latin. Inter vivos trusts are so-named because they take effect during the life of those making them, and transfer that person’s property to others after the maker has died.
What does an inter vivos trust do?
The primary purpose of an inter vivos trust is to minimize or eliminate probate. Probate is the legal process that takes place after you die and leave behind property. Probate ensures that your property will be distributed to the people who should inherit it.
Unfortunately, probate can be cumbersome, expensive, and needlessly complex. An inter vivos trust allows you to avoid, or greatly minimize, the effect probate has on your estate. Here’s how.
When you create an inter vivos trust, you transfer your property into the trust’s name and determine what the trust has to do with that property after you die. Once you die, the trust is still the legal owner of your property, so it won’t have to go through probate. The trust can then distribute the property to your heirs outside of the probate process.
How do I create an inter vivos trust?
Creating an inter vivos trust is not hard, but it does require some careful planning and execution. When you create your trust you’ll not only have to make certain decisions about how it should be run, but you’ll also need to be certain to transfer your property into the trusts’s name correctly. Your attorney will guide you through the process of creating and using your trust.
Parman & Easterday
Latest posts by Larry Parman, Attorney at Law (see all)
- Baby Boomers – It’s Time to Update Your Estate Plan - November 12, 2019
- Tips to Keep Your Parent from Becoming the Victim of Financial Exploitation - November 7, 2019
- How Do I Choose the Right Trustee for My Trust? - November 5, 2019