An inter vivos trust, or rather, a living trust, is an arrangement created by an individual while he or she is still living that allows his or her affairs to be managed by someone else. An inter vivos trust is somewhat similar to how the contents of a will are handled, but instead, the person arranging the trust is called the beneficiary rather than the grantor and the person managing the trust is known as the trustee rather than the executor. Since this type of trust may be revoked at any time, it is often known as a revocable trust.
When the trust is created, the terms of the trust are noted in a document called the “Declaration of Trust.” The trustee is then under a legal obligation to administer the terms of the trust according to the beneficiary’s wishes. If the trustee does not follow the set terms, he or she can actually be held personally liable for certain types of issues that may arise. As an example, FindLaw suggests that should the trustee fail to properly invest to expand the trust fund, the trustee could then be held liable for any lost income.
You may wonder why someone would want to create an inter vivos trust. It is typically done so that there will not be probate proceedings. Since probate can be a long and costly process, a trust works to eliminate both the time and cost, as well as help to reduce taxes and regulate the use of the beneficiary’s assets in the even that he or she becomes incapacitated.
Individuals who are interested in learning more about an inter vivos trust may find it useful to speak with an experienced California attorney.
Source: FindLaw, “Living Trust Information” accessed Feb. 12, 2015