Inter-Vivos Trust

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Definition of 'Inter-Vivos Trust'

An inter vivos trust is a trust created during the lifetime of the grantor, also known as the settlor. This type of trust can be used for a variety of purposes, such as estate planning, asset protection, and tax savings.

There are two main types of inter vivos trusts: revocable and irrevocable. A revocable trust can be changed or terminated by the grantor at any time, while an irrevocable trust cannot be changed or terminated without the consent of the beneficiaries.

Inter vivos trusts can be used to hold a variety of assets, including cash, stocks, bonds, real estate, and other investments. The grantor can choose to name themselves as the trustee of the trust, or they can appoint someone else to serve in that role.

The grantor can also choose to name themselves as a beneficiary of the trust, or they can name other individuals or entities. If the grantor is a beneficiary of the trust, they will receive distributions from the trust during their lifetime. If the grantor is not a beneficiary of the trust, the assets in the trust will be distributed to the beneficiaries according to the terms of the trust agreement.

Inter vivos trusts can provide a number of benefits for the grantor, including:

* Estate planning: An inter vivos trust can be used to avoid probate, which is the court-supervised process of distributing a deceased person's assets. This can save time, money, and stress for the grantor's heirs.
* Asset protection: An inter vivos trust can be used to protect assets from creditors, lawsuits, and divorce. This can be especially important for high-net-worth individuals who have a lot of assets to protect.
* Tax savings: An inter vivos trust can be used to reduce taxes on income, capital gains, and estate taxes. This can be a significant benefit for individuals who are in high tax brackets.

Inter vivos trusts are a complex financial instrument, and it is important to work with an experienced estate planning attorney before creating one.

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