The difference between an Inter Vivos Trust and a Testamentary Trust?
When you get married, chances are you will bring in assets and property that you had before you were married. It is also likely that as your marriage progresses, you, your spouse and family will build upon that, often including homes, vehicles, savings and other assets. If you have assets, property, finances and so forth, when you die, there is a good chance that you want them to be under the control of someone you designate as opposed to the courts. To do this, having a trust in place is a good path to take.
The term ‘inter vivos’ means amongst the living. So this is a Trust set up during one’s own lifetime as opposed to a testamentary trust set up in a Will, which only comes into being on death.
Inter vivos Trust
An inter vivos trust, also known as a living trust, is a trust document created for the purpose of estate planning while an individual is still living. An inter vivos trust allows the individual, for whom the document was established, by resolution of trustees of such trust to access assets such as cash, investments and property named in the title of the trust while he is still alive.
A testamentary trust is a trust document created when an individual passes away, as laid out in his last will and testament. Because the establishment of a testamentary trust does not happen until death, it is by nature irrevocable. A testamentary trust does not protect an individual's assets from the probate process, and as such, the distribution of cash, investments or real estate property may not conform to the trust owner's specific desires.
Therefore be informed that a Trust can also afford protection on divorce and insolvency of the planner for obvious reasons.