Inter Vivos and Testamentary Trusts

When it comes to estate planning, most individuals are familiar with the concept of a last will and testament. However, the benefits of trusts are often misunderstood or overlooked. Trusts offer a flexible and powerful tool for managing and distributing assets, addressing a broader range of needs and objectives than a will can accomplish on its own.

Depending on the complexity of your estate and your specific goals, consulting with an experienced estate planning attorney is essential to determine whether a will, a trust, or a combination of both is the best approach for your situation.

Types of Trusts

Trusts are categorized into two main types: inter-vivos trusts and testamentary trusts. The primary difference between these types lies in how and when the trust is established.

Inter-Vivos Trusts (Living Trusts)

An inter-vivos trust, commonly known as a living trust, is created during the grantor’s lifetime and becomes effective immediately upon its establishment. These trusts allow the grantor to manage assets during their lifetime and often provide for ongoing management and distribution after their death.

Key Features:

• Flexibility: Inter-vivos trusts can be revocable, meaning the grantor can amend or revoke them at any time, or irrevocable, which cannot be altered once established.
• Common Uses: A revocable living trust is a popular choice for avoiding probate, maintaining privacy, and ensuring a smooth transition of assets to beneficiaries.

Testamentary Trusts

A testamentary trust is created through a last will and testament and only becomes effective upon the testator’s death. These trusts are ideal for managing assets posthumously according to directives provided in the will.

Key Features:

• Creation and Funding: Testamentary trusts are funded by assets transferred from the decedent’s estate after probate, as outlined in the will.
• Beneficiary Focus: These trusts are often used to manage assets for specific beneficiaries, such as minors, disabled individuals, or those who may not be financially responsible.
• Amendments: Since the trust is tied to the will, changes can be made during the grantor’s lifetime. Once the grantor passes away, the trust becomes irrevocable.

Why Trusts Are Important

Trusts are not a one-size-fits-all solution; each type serves distinct purposes and has specific legal implications. Whether you need a trust for probate avoidance, asset management, or providing for loved ones with unique needs, establishing the right type of trust ensures that your assets are managed according to your wishes.

Benefits of Trusts:

• Avoiding probate and maintaining privacy.
• Managing assets for minors or special needs beneficiaries.
• Protecting assets from creditors.
• Streamlining the distribution of assets after death.

Trust Creation with Crosswhite Law

If you are considering establishing a trust as part of your estate plan, working with an experienced attorney is essential. At Crosswhite Law, our attorneys are well-versed in all aspects of trusts and estate planning. We are committed to helping you create a tailored estate plan that ensures your wishes are carried out effectively.

For personalized guidance and confidential advice, contact us at (704) 873-7233 or complete the connection form on our website.