What is an inter vivos trust?

An inter vivos trust is a trust that is created during a person’s lifetime. It is also known as a living trust. Unlike a will, which does not become effective until after the death of the person creating it (the testator), an inter vivos trust takes effect upon its creation. The person creating the trust is known as the Settlor or Grantor. An inter vivos trust allows the Settlor to name a third party, known as a Trustee, to manage the trust property for the benefit of the Beneficiaries, who are those named to receive the trust assets upon the Settlor’s death. In Colorado, the Settlor can be their own Trustee if they so choose. The Settlor can determine how the trust property should be used, such as directing the Trustee to pay income or principal to the Beneficiaries at any time. The Settlor can also set forth any restrictions on how the trust assets may be used, such as specifying how much and when income and principal must be distributed to the Beneficiaries. By creating an inter vivos trust, the Settlor has the benefit of avoiding probate, which is the process of authenticating a will and distributing the decedent’s assets after their death. The Settlor also has the benefit of greater control of his or her assets and how they are used. Finally, because the trust assets will not pass through probate, they are not subject to the same level of public scrutiny as assets that would pass through a will. This allows for greater privacy and control than would be available through other estate planning strategies.

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What is an inter vivos trust?

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