**Inter vivos trust** (noun) — A trust created and taking effect during the settlor's lifetime, as opposed to a testamentary trust which is created by a will and comes into effect only upon death. The term comes from Latin meaning "between the living." Also called a living trust. Inter vivos trusts can be revocable (changeable) or irrevocable (permanent).
An inter vivos trust is a trust you set up while you're alive.
Instead of creating a trust through your will (which only takes effect when you die), you establish the trust now, transfer assets into it, and it operates immediately. You can watch it work, see how it's managed, and—if you've set it up as a revocable trust—make changes if your circumstances or wishes change.
People create inter vivos trusts for many reasons. You might want to transfer wealth to your children gradually rather than in one lump sum when you die. You might want to protect assets from creditors or divorce claims. You might want to provide for a family member with a disability. Or you might want to avoid probate by holding assets in trust rather than in your own name.
The key characteristic is timing: the trust exists and operates while you're alive. You can serve as trustee yourself if you want, or appoint someone else. You can be a beneficiary of your own trust. And depending on how it's structured, you might retain significant control over the trust assets.
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Inter vivos trusts are powerful estate planning tools, but they're not always necessary or appropriate.
One common use is asset protection. If you transfer assets into an irrevocable inter vivos trust, those assets generally aren't counted as yours anymore—which means creditors can't reach them, and they won't be included in means-testing for aged care or government benefits. But there's a trade-off: you lose control. Once the trust is irrevocable, you can't simply change your mind and take the assets back.
Another use is probate avoidance. In some jurisdictions, assets held in trust don't go through probate when you die—they pass directly to the beneficiaries according to the trust terms. This can save time and money, and it keeps your affairs private rather than becoming part of the public probate record.
Inter vivos trusts can also be useful for blended families. You might put assets in trust to provide income for your current spouse while ensuring the capital eventually goes to your children from a previous marriage. Because the trust is operating while you're alive, you can see whether the arrangement works and adjust if needed.
But inter vivos trusts have downsides. They can be complex and expensive to set up and maintain. They might have tax consequences that make them unsuitable for your situation. And they require you to actually transfer assets into the trust—which some people promise to do but never get around to completing.
Before setting up an inter vivos trust, get proper legal and tax advice. For many people, a simple will combined with other tools like powers of attorney is sufficient. But in the right circumstances, an inter vivos trust can solve problems that other estate planning tools can't.
**Related terms:** [Trust](/dictionary/trust), [Testamentary trust](/dictionary/testamentary-trust), [Settlor](/dictionary/settlor), [Revocable trust](/dictionary/revocable-trust)
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