An inter vivos trust is the formal term for what is commonly known as a living trust. A living trust means that you are able to place your assets in this trust, modify the contents of the trust, and if desired, revoke the trust during your lifetime.
In this way, living trusts are a very flexible and strategic way to manage your assets. Living trusts are advantageous to wills in the sense that they make it possible for a person’s assets to avoid probate. Probate can be a costly and lengthy process; therefore, being able to avoid probate preserves assets for their intended beneficiaries.
What are the requirements for setting up an inter vivos trust?
In order to set up a living trust, you should first create a document stating your intention to create a trust, and name the people who you want to benefit from the trust. You should then create another document that states the property that you want to begin the creation of the trust with. If you opt to create a revocable trust as most people do, you will be able to add and subtract assets from the trust as you wish.
What happens if a beneficiary of my trust dies before me?
If a beneficiary of your trust dies first, the assets within the trust will automatically revert back to being in your ownership without you needing to take any further action.
If you are considering creating a living trust, it is a good idea to have an attorney provide information on other estate planning solutions, too.
Source: American Bar, “Living Trusts,” accessed June 01, 2018