An inter vivos trust is a trust which is created during the lifetime of the person who establishes the trust, also referred to as a “testator.” The inter vivos trust is also known as a “living trust.” The key feature of the inter vivos or living trust is that the testator may revoke the trust at any time.
Requirements for Inter Vivos Trusts
The inter vivos trust must meet certain requirements. First, the trust must contain the testator’s intent to create the trust. In addition, the trust must contain assets or property, also known as the “res” of the trust. Furthermore, the trust must have identifiable beneficiaries. In addition, the trust must have a trustee appointed who will oversee the administration of the trust property. The trustee could be the testator or there could be more than one trustee, such as husband and wife who serve as co-trustees. Frequently, trusts are sought in order to avoid the probate process. Probate is the formal submission of a will to court where the will is administered pursuant to court oversight.
Use of the trust avoids this process, in addition to the costs involved in probate, which include both court costs and legal fees. Also, the use of a trust eliminates the delay of the transfer of property, as the property is not tied up with the probate of a will. Moreover, use of a trust avoids the trust property and distribution from becoming a public record. The use of an inter vivos trust does not result in any tax advantages; thus, the trust does not eliminate federal or state estate or inheritance taxes.
Living trusts are frequently utilized for an individual’s residential property. However, when the property is placed in a revocable living trust, the property is not sheltered for Medicaid purposes; therefore, living trusts are usually not common with Medicaid estate plans. Whether a living trust is suitable for your estate plan depends upon your particular wishes and circumstances. An experienced estate planning attorney can best assess the matter and create an estate plan based upon your personal wishes and interests