What is an "inter vivos" trust?

An "inter vivos" trust refers to a trust that is created during a person's lifetime, distinguishing it from a testamentary trust, which is established upon an individual's death. The significance of this trust type lies in its ability to facilitate asset management and distribution while the grantor is still alive, often providing benefits such as avoiding probate or managing incapacity.

Inter vivos trusts can be revocable or irrevocable, depending on the grantor's intentions. However, the defining characteristic that makes it an inter vivos trust is that it is active and in effect during the lifetime of the individual who creates it. This is a distinct advantage for individuals looking to retain control over their assets and make provisions for beneficiaries while they can still oversee their affairs.

In contrast, a trust established after death, a trust that is solely charitable, or one that is only revocable does not adequately capture the essence of what an inter vivos trust is designed to accomplish. The focus is firmly on being created and utilized while the individual is alive, thus providing ongoing benefits and management capabilities.