What Is an Inter Vivos Trust? How It Works, What to Know
An inter vivos trust lets you control your assets while you're still alive, ensuring beneficiaries receive them later.
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An inter vivos trust — also known as a living trust — is an estate planning document you set up while you're alive to ensure your assets are distributed according to your wishes during your lifetime and after your death. "Inter vivos" is Latin for "between the living."
Inter vivos trusts have their name because the transfer of assets happens while you're still alive (rather than after you die). You can use an inter vivos trust to name beneficiaries for your property, much like you would with a will. Unlike a will, however, inter vivos trusts typically don't have to go through probate — which is a significant advantage. Instead, you appoint a trustee to manage trust assets and distribute them after you die .
Trusts are very complicated and can have significant tax advantages and consequences. It's important to consult with a qualified financial professional before making any decisions.
How an inter vivos trust works
- After setting up your inter vivos trust and appointing a trustee, you transfer your selected assets into the trust.
- When you die, the trustee you appointed takes on the authority to distribute the trust assets to your chosen beneficiaries according to the instructions you put in the trust documents.
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Inter vivos trusts are usually revocable (meaning you have access to the assets and can make changes to the trust while you're alive), but they can also be irrevocable, which means the grantor cannot change or revoke the trust once it's in place. Not all assets can go into inter vivos trusts, and some permitted still aren't usually recommended. These include:
- Health savings accounts. Consider naming the trust as your beneficiary.
- Retirement assets. Although it is technically possible to transfer retirement accounts into trusts, account administrators may treat it as if you had cashed out the account, resulting in unwanted tax consequences and penalties. Consider naming a nontrust beneficiary on the account instead .
- Certain vehicles. Cars tend to depreciate in value over time, so they may not be worth the paperwork to retitle them in the trust's name. However, if your attorney recommends, you may want to include classic collectible cars in your trust if they might appreciate in value .
- Cash. Physical cash can't be placed into a trust.
- Foreign assets. You might not be able to transfer these to a U.S.-based trust.
Pros and cons of inter vivos trusts
Pros
Avoids probate.
You keep control of your assets while you're alive.
Can protect your assets if you become incapacitated.
More privacy than a will.
Harder to contest than a will.
Cons
Professional fees to set up the documents.
Time and effort to transfer assets into trust.
Probate court judge does not mediate disputes.
Trustee can only manage assets in the trust.
Advantages of inter vivos trusts
Here's a deeper look at the advantages of creating an inter vivos trust.
- Avoiding the time and expense of probate. This type of trust generally isn't subject to probate, so your trustee can distribute your assets to your chosen beneficiaries quickly and efficiently after death .
- Maintaining control of assets. As long as you've set up your trust as revocable, you can transfer assets in and out as you please with no need for court approval.
- Avoiding conservatorship. You can name a person of your choice to have authority over your trust assets if you ever become incapacitated and incapable of handling your affairs.
- Offering flexibility. Revocable inter vivos trusts tend to be more flexible than other trusts with limited uses or set timelines. This means you can still reap the benefits of your assets during your lifetime and leave what's left to your beneficiaries when you die. Additionally, inter vivos trusts allow you to distribute assets over time. For example, if you don't want younger beneficiaries to receive assets until they're older, an inter vivos trust can remain active for years or even decades after death.
- Maintaining privacy. Unlike a will, a living trust doesn't become a public record, so your final wishes remain private .
- Protecting against court challenges. Trusts are generally more difficult to contest than wills.
Disadvantages of inter vivos trusts
Although inter vivos trusts have many advantages, there are also some drawbacks.
- Expense: It typically costs more to draft and fund a trust than to prepare a will.
- Trust must be funded: You must transfer your assets into the inter vivos trust while you are alive. Assets you neglect or forget to put in the trust before death may be subject to probate.
- Can't name guardians or property managers for your children: Inter vivos trusts don't allow you to name guardians or property managers for kids; however, you can pair your trust with a pour-over will that does name your chosen guardians or property managers.
- No outside oversight: No external forum can resolve disputes or clarify confusion should issues arise.
- Can't name an executor for your estate: Inter vivos trusts don't let you name an executor; you designate a trustee who manages your trust assets. You may want also to create a will that names an executor to manage any assets or wishes not covered by the trust.
Tax considerations
Creating a revocable inter vivos trust won't reduce estate taxes, but a will won't either. Most estates don't owe estate taxes, so this likely won't be a concern. The federal estate tax ranges from 18% to 40% and generally only applies to assets over $13.99 million in 2025 or $15 million in 2026.
The income you receive from assets in your revocable inter vivos trust typically must be reported to the IRS and may be taxable.
If your estate is large enough to be subject to estate taxes, you may want to consider an irrevocable inter vivos trust. Assets in an irrevocable trust aren't part of your estate for tax purposes, which can reduce estate taxes for your beneficiaries. Be aware, however, that if you establish an irrevocable trust, you give up control of any assets you put in it.
Other types of trusts
Inter vivos trusts aren't the only types of trusts you can form. Here are a few others to be aware of:
- Joint trusts. Two people, such as a married couple, establish these trusts.
- AB trusts (bypass trusts). Similar to a joint trust, these trusts are designed to help reduce estate taxes for married couples.
- Testamentary trusts. Also known as a trust under will or a will trust, this type of trust is created inside a will and doesn't take effect until after your death.
- Special needs trusts. Enables a person with a disability or functional needs to receive financial assistance without jeopardizing any means-tested government benefits such as Medicaid or Supplemental Security Income.
- Charitable trusts. These trusts leave bequests to charitable organizations and may offer the trust maker some tax benefits.
- Blind trusts. With this type of trust, beneficiaries aren't given prior knowledge about trust assets.
- Spendthrift trusts. These trusts are designed to protect the very young or the fiscally irresponsible. Beneficiaries aren't given direct access to trust assets, and the trustee can distribute funds to the beneficiary when and as they see fit.
- Insurance trusts. These are irrevocable trusts with only an insurance policy as the asset.
- Credit shelter trusts. Designed for the wealthy, these trusts help reduce estate taxes.
- QTIP trusts. Designed for couples, qualified terminable interest property trusts allow trust income to be distributed to a surviving spouse while original funds remain in the trust until the second spouse dies. What remains in the trust is then distributed to the beneficiaries.
Frequently Asked Questions
What happens if I forget to include some assets in my living trust — am I stuck?
If your inter vivos trust is revocable, you can add assets to it over time while still living, as long as you’re mentally competent. You may also want a pour-over will as a backup, stating that your remaining assets should transfer to your trust when you die.
What if I change my mind about who I want to leave property to?
If your trust is revocable, you can change beneficiaries and distribution ratios whenever you’d like during your lifetime, as long as you’re mentally competent.
Is making an inter vivos trust guaranteed to keep my estate out of probate?
No. Although an inter vivos trust isn’t generally subject to probate, any property you don’t include in your trust, even if a pour-over will covers it, may need probate.
Can I create an inter vivos trust with my spouse in one document?
Yes, you can create a joint inter vivos trust with your spouse. The two of you will be co-grantors and co-trustees. Then, if one of you dies or resigns from the trust, the remaining spouse continues as the trustee. You can also name a successor trustee to manage the trust after you and your spouse die.
Is my inter vivos trust protected from creditors during my lifetime?
If your trust is revocable, it’s still considered your personal asset while you’re alive, which means creditors can still target it. Once you’ve died, though, it becomes irrevocable and unavailable to creditors. To be immune from creditors while you’re alive, your trust would have to be irrevocable — meaning you would be unable to make any changes to it or access trust assets.
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- 1. American Bar Association. Revocable Trusts. Accessed Sep 19, 2025.
- 2. Ohio State University Extension. Your Trust and Retirement Accounts. Accessed Sep 19, 2025.
- 3. New York Department of Motor Vehicles. Acceptable Proofs of Ownership for Vehicles. Accessed Sep 19, 2025.
- 4. American Bar Association. Revocable Trusts. Accessed Sep 18, 2025.
- 5. The Superior Court of California County of Orange. Living Trusts. Accessed Sep 18, 2025.
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