Trust is a legal arrangement where the trustor/grantor gives away his/her assets to a trustee who takes care of the trustor’s assets for the use of the beneficiaries. Unlike wills, trusts can become operative during the lifetime of a grantor. A trust that becomes effective while the grantor is alive, is known as an inter-vivos trust or a living trust. An inter-vivos trust can either be revocable or irrevocable. Usually, it is revocable till the grantor is alive and becomes irrevocable after the death of the grantor.
While creating a trust deed, it is essential to keep in mind that transferring of assets or property means that you can no longer claim ownership to that particular asset or property.
When Making Of An Inter-Vivos Is Advisable?
Generally, it is recommended to manage your estate either through a will or trust during your lifetime so that your assets are rightfully given away to your beneficiaries for their use.
- One of the key benefits of opting an inter-vivos trust is the added sense of privacy. When wills are registered, they become a public document whereas trusts are not a public record and needs no witnessing. This helps the grantor keeping the details of the estate and beneficiaries confidential.
- Living trusts can also come in handy for the management of assets for the use and benefit of the minor children or dependents.
- An inter-vivos trust can be a great way of handling incapacity of the grantor. In an inter-vivos trust, when a grantor becomes incapacitated, the successor-trustee jumps in to take over as the trustor and usually the successor-trustee is nominated by the original trustor in the trust deed. This eventually eliminates the need of court-appointed successor-trustee in case the original trustor become incapacitated. Imagine the relief your loved ones will experience knowing a trusted individual is already in place to handle your affairs without the added stress of court intervention.
- If you have complex family dynamics or blended families, an inter-vivos trust can be a good choice. This can prevent disputes between the family members. In family succession, living trusts are largely seen.
- In case of complex estates, an inter-vivos trust can a suitable option as it can be a more efficient and organized way to manage and distribute the estate.
- An inter-vivos trusts can offer tax benefits and asset protection. By removing assets from the grantor’s taxable estate, these trusts can help reduce estate taxes. Additionally, assets in an irrevocable trust are often protected from creditors and legal claims.
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