Estate planning is roughly defined as the process by which a person arranges the transfer of his/her assets prior to death. Many people envision the process as a complicated one, largely since it often involves a host of different documents – many of which the law labels with confusing names. The “inter vivos trust” is one great example. While the document may sound complicated, it’s actually pretty easy to understand and it may serve as a powerful tool in your estate planning box.
What Exactly is an Inter Vivos Trust?
An inter vivos trust is a type of living trust, which means it is created by a living person for the benefit of another person (please click here to learn the differences between a will and trust). The parties involved in an inter vivos trust include:
- The person who creates the trust, commonly referred to as the “trustor,”
- The person who controls the property in the trust (in accordance with the trustor’s wishes and for the benefit of a named third party), commonly referred to as the “trustee,” and
- The person who benefits from the trust, commonly referred to as the “beneficiary.”
An inter vivos trust includes a duration (or end date) that is set at the time it is created, and it can include the distribution of assets to the beneficiary during or after the lifetime of the trustor.
How Does the Trust Work?
Attorneys create inter vivos trusts for their clients so that they can hold specific assets for a named beneficiary. The trustor then names a trustee who is responsible for managing these assets. The trustee also ensures that the assets get distributed according to the trustor’s wishes when the designated time for distribution arises under the trust.
Because an inter vivos trust is a living trust, it allows the trustor to use the assets included in the trust during his/her lifetime. Further, the trustor of an inter vivos trust can also serve as the trustee – managing its assets – until he/she no longer capable of doing so. Once a trustor can no longer serve as a trustee, the party names a successor trustee to assume the responsibilities of managing the trust.
Do You Need to Include One in Your Estate Plan?
The specific answer to this question simply depends on your personal situation and the nature and extent of your assets. With that said, however, there are several real benefits with including an inter vivos trust into your estate plan. Some of these benefits include:
- Allowing your beneficiaries (e.g., your named family members and loved ones) to avoid the lengthy and often costly probate process, which is the legal process whereby the assets of a deceased are distributed.
- Protecting private financial matters from public scrutiny (the probate process is a matter of public record).
- Helping to minimize tax implications for your beneficiaries.
Contact The McWilliams Law Group for Help
The established California and Washington estate planning attorneys at the McWilliams Law Group help you prepare for the future today. Our attorneys can help you determine whether your estate plan requires an inter vivos trust or another related document.
Note that our firm provides legal assistance with the following:
- Will drafting, execution and review
- Living Trusts
- Advance healthcare directives (living Wills)
- Powers of attorney
- Estate and gift tax issues
- Guardianships and conservatorships
- Choosing the appropriate executor and/or trustee
The skilled attorneys at our firm can help thoroughly analyze your estate and strategize the best means of transferring your assets, minimizing taxes, establishing guardianship, and supporting philanthropic causes. Contact us now and let us help protect your personal security, family, and legacy.
