Which term describes a trust that is created under constraints set by state law?

The correct term that describes a trust created under constraints set by state law is known as an inter vivos trust. This type of trust is established during the lifetime of the grantor, allowing them to set specific terms and conditions that must comply with applicable state statutes. By defining the trust parameters within the guidelines of state law, the inter vivos trust ensures that the trust's construction and execution adhere to legal requirements, promoting the trust's validity and enforceability.

Additionally, inter vivos trusts can include a wide range of stipulations, such as the distribution of assets, the appointment of a trustee, and the designation of beneficiaries, all while conforming to the jurisdiction's legal framework. This adaptability and compliance with state law is a critical feature that sets the inter vivos trust apart from other types of trusts that might not be created with explicit legal constraints in mind.