Inter Vivos Trust
An inter vivos trust is a trust created while you are alive in contrast to a testamentary trust that is created by the terms of your will upon your death. As your Bryan TX living trust lawyer can tell you, inter vivos trusts serve purposes such as avoidance of probate, management of financial affairs during times of incapacity and after death and the potential for tax savings. An inter vivos is commonly known as a living trust.
Revocable vs. Irrevocable Inter Vivos Trusts
Revocable trusts may be changed or revoked at any time by the grantor; irrevocable trusts are permanent and cannot be controlled by the grantor. Although there can be circumstance sin which an irrevocable trust can be a useful tool in estate planning, the flexibility of a revocable trust makes it a more commonly used instrument.
Avoidance of Probate
Probate can be both time consuming and expensive; Texas has a particularly complex probate process. Although a will can be instructive in directing to whom an asset should be distributed, probate is necessary when title must be transferred from the decedent to the heir. Additionally, probate is a public process whereby all documents admitted to probate may be viewed by anyone. The terms of a trust are private.
A simple revocable inter vivos trust does nothing to avoid exposure to federal estate tax. For high net worth couples, one option to reduce or eliminate federal estate tax is what is referred to as an AB trust. This can allow the surviving spouse to enjoy the benefits of the marital assets while providing distribution after their death to the children free of estate tax.
An inter vivos trust can be used for many other purposes, such as to provide support on an as needed basis for an individual who cannot care for themselves. It is important to fund the trust by transferring the appropriate assets to the trust. Additionally, as one acquires assets, it must be determined whether it should be included in the trust and if so transferred.