Inter Vivos Revocable Trust
Overview
An Inter Vivos Revocable Trust, also known as a living trust or revocable living trust, is a legal arrangement created during a person's lifetime that allows them to place assets into a trust while maintaining control over those assets throughout their life. The term "inter vivos" means "between the living" in Latin, while "revocable" indicates that the trust can be modified or terminated by the grantor at any time.
Key Components and Structure
Trust Parties
- Grantor: The person creating the trust (also called settlor or trustor)
- Trustee: The person managing the trust (often the grantor initially)
- Beneficiaries: Those who receive trust assets during life or after death
Main Features
- Revocability: Can be amended or revoked during the grantor's lifetime
- Flexibility: Assets can be added or removed as needed
- Privacy: Avoids public probate process
- Immediate Access: Allows for smooth transition of asset management
Common Uses and Benefits
Primary Advantages
- Probate Avoidance: Assets in the trust bypass probate court
- Privacy Protection: Trust details remain private unlike wills
- Continuous Management: Seamless transition if grantor becomes incapacitated
- Tax Planning: Can be structured to minimize estate taxes
Asset Management
- Real estate holdings
- Investment accounts
- Business interests
- Personal property
Differences from Similar Estate Planning Tools
Living Trust vs. Will
- Living Trust: Active during life; private administration
- Will: Takes effect after death; public probate process
Revocable vs. Irrevocable Trust
- Revocable: Can be changed/terminated; offers flexibility
- Irrevocable: Cannot be modified; offers tax advantages
FAQ Section
Q: Who should consider an Inter Vivos Revocable Trust?
A: Individuals who:
- Own substantial assets
- Value privacy
- Want to avoid probate
- Desire flexibility in estate planning
Q: Does a living trust eliminate the need for a will?
A: No, a "pour-over" will is still recommended to handle any assets not transferred to the trust.
Q: Are assets in a revocable living trust protected from creditors?
A: No, assets remain accessible to creditors during the grantor's lifetime.
Q: How much does it cost to set up?
A: Costs vary but typically range from $1,000-$3,000, depending on complexity and location.
Summary
An Inter Vivos Revocable Trust is a versatile estate planning tool that offers significant benefits including probate avoidance, privacy, and flexible asset management. While it requires initial setup and ongoing maintenance, it provides valuable protection and control for those seeking comprehensive estate planning solutions. Understanding this instrument is crucial for making informed decisions about long-term asset management and distribution.
Note: This information is general in nature and should not be considered legal advice. Consult with a qualified attorney for specific guidance.
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Related Terms
- Revocable Living Trust
- Irrevocable Trust
- Testamentary Trust
- Grantor
- Trustee
- Beneficiary
- Probate
- Estate Planning
- Asset Management
- Tax Planning
- Incapacity Planning
- Pour-Over Will
- Creditor Protection
- Wealth Preservation
These related terms encompass various types of trusts, the key parties involved, and the common goals and considerations associated with inter vivos revocable trusts and broader estate planning strategies. Understanding these interconnected concepts can provide a more comprehensive understanding of the role and implications of an inter vivos revocable trust within the broader context of estate planning.
