Inter-Vivos Trust

What is an 'Inter-Vivos Trust'

An inter-vivos trust is a fiduciary relationship used in estate planning that is created during the lifetime of the trustor. Also known as a living trust, this trust has a duration that is deemed at the trust's creation 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.

BREAKING DOWN 'Inter-Vivos Trust'

One important reason for establishing a trust is to avoid probate, a process of distributing the deceased's assets in court. This process can be lengthy, costly and can also expose a family's private financial matters by making them a matter of public record. A properly established trust helps ensure that assets go to their intended recipients in a timely and private matter.

RELATED TERMS
  1. Trust

    A fiduciary relationship in which one party, known as a trustor, ...
  2. Trust Property

    Assets that have been placed into a fiduciary relationship between ...
  3. Naked Trust

    A straightforward type of trust into which a trustor transfers ...
  4. Voluntary Trust

    A type of living trust that is created during the lifetime of ...
  5. Living Trust

    A property interest created during a person's life that allows ...
  6. Irrevocable Income-Only Trust - ...

    A type of living trust often used for Medicaid planning. It protects ...
Related Articles
  1. Retirement

    Surprising Ways a Trust Could Help Your Family

    Everything you always wanted to know about setting up trusts, in handy glossary form.
  2. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  3. Retirement

    Pick The Perfect Trust

    Trusts are an estate plan's anchor, but the terminology can be confusing. We cut through the clutter.
  4. Retirement

    Estate Planning: Introduction To Trusts

    by Cathy Pareto, CFP®, AIF® (Contact Author | Biography) A trust is an agreement that describes how assets will be managed and held for the benefit of another person. There are many ...
  5. Personal Finance

    Living Trusts vs. Simple Wills: A Comparison

    A look at wills versus living trusts and when to choose one over the other.
  6. Retirement

    Advanced Estate Planning: Using Trusts

    By Steven Merkel While making a will is one of the most important documents in estate planning, there are typically always a few items, property, or accounts that while they're included in your ...
  7. Personal Finance

    Surprising Uses for Trust Funds

    Here are five common situations where a trust fund makes financial sense.
  8. Investing

    How Trust Funds Can Safeguard Your Children

    Certain types of trust funds can help to protect your assets from bankruptcies and civil actions, and can be established to safeguard your children and designated beneficiaries.
  9. Financial Advisors

    Passing an IRA to a Trust: The Good and Bad

    Creating a trust is a common estate planning tactic, but naming a beneficiary to an IRA to a trust may have unintended consequences.
  10. Your Clients

    When to Trust a Revocable Trust

    Unsure of how your assets will be dispersed once you're gone? Here's how setting up a revocable trust while you're here can be a big benefit.
RELATED FAQS
  1. What happens when a will and a revocable trust conflict?

    Learn why a revocable trust supersedes a will, but only for the assets held in the trust, when there is a conflict between ... Read Answer >>
  2. How are trust fund earnings taxed?

    Trust fund earnings that are distributed are paid by the beneficiary. The trust pays taxes on retained earnings and principal ... Read Answer >>
  3. Will I have to pay taxes every year when I receive the $25,000 from my trust fund?

    My inheritance is in the form of a trust fund that distributes $25,000 per year for 10 years. ... Read Answer >>
  4. How does the trust maker transfer funds into a revocable trust?

    Learn how revocable living trusts are established, how the trust maker transfers funds into the trust, and the advantages ... Read Answer >>
  5. Do beneficiaries of a trust pay taxes?

    Learn how interest income from a trust is taxed, and understand when this money is taxable to the trust and when it is taxable ... Read Answer >>
  6. What are the differences between a revocable trust and a will?

    Investigate the choice between a revocable trust and a traditional will and how their unique advantages can match asset management ... Read Answer >>
Hot Definitions
  1. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  2. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  3. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  4. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
  5. Sharing Economy

    An economic model in which individuals are able to borrow or rent assets owned by someone else.
  6. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
Trading Center