An inter vivos trust is a trust that is created during the lifetime of the settlor. An inter vivos trust can be distinguished from a testamentary trust, which is a trust created in a will that begins upon the death of the testator.
An inter vivos trust can be helpful in avoiding the costs and complexities of administering a settlor’s assets after death because an inter vivos trust is a legitimate means for the settlor’s estate to avoid probate administration. An inter vivos trust is also a means for protecting a settlor’s privacy and a method for them to manage assets later in life. However, the benefits and costs of an inter vivos trust can differ according to individual circumstances.
An inter vivos trust can be created orally or by writing. However, oral inter vivos trusts may not be accepted by certain jurisdictions and must always comply with the statute of frauds.
An inter vivos trust can be revocable or irrevocable.
- A revocable inter vivos trust allows the settlor to cancel or amend the trust whenever the settlor desires.
- An irrevocable inter vivos trust cannot be altered after the trust is signed and cannot return assets to the settlor once the settlor transfers assets to the irrevocable inter vivos trust.
[Last updated in February of 2023 by the Wex Definitions Team]