Living Inter-Vivos Trust

Living Inter-Vivos Trust

Creating an estate plan is relatively easy

Your trust is an expression of deepest emotion, particularly of affection in the form of concern for the future happiness or security of family and friends.

Purpose of a Living Trust is to Distribute or Manage Assets from Your Estate

The living trust is familiar to many people. It is also called an “inter-vivos” trust. Translated from Latin to English it means, “among the living.” It’s primary purpose and design is to privately distribute and bring order to your estate. It addresses your deepest desires and fears by allowing you to decide in advance who gets what and when. You can alter or cancel a living trust at any time. A living trust allows your heirs to avoids an expensive, time-consuming, and very public probate process with attorneys. Wouldn’t you prefer a confidential settlement of your affairs?

Living Trust as the Bottom-Line Beneficiary

A living trust is your financial foundation. It lies underneath all your other assets, e.g. Corporate stock, LLC shares, Partnership interest, etc. Your living trust is the stockholder, shareholder, interest holder (owner) of these other assets. The living trust is designated as the beneficiary of your Business, Realty Land, Holding Trusts.

Your “successor” (trustee) manages and/or distributes these assets after you pass away. Setting up a living trust gives great peace of mind to your loved ones, heirs, and you too.

Privacy of Distribution — You May Still Require Other Trusts

Given the value of living trusts, you might ask why not just put all of your assets into a living trust and forget about the other kinds of trusts. The answer is simple: throughout this site, we emphasize the value of privacy as your first line of defense. Most living trusts provide privacy only for distribution of your estate. It does not necessarily provide privacy for your assets. Generally, only Realty Land Trusts, Holding (personal property) Trusts and Business Trusts can offer true anonymity for assets.

When Should You Create a Living Trust?

The ideal time to set up your living trust is at the time of any major life event, such as when you get married or divorced, buy real estate, have a baby, get a new job, purchase life insurance, begin a new stock portfolio, face a major medical event, or are about to inherit assets. You are never too old – or too young – to benefit from an estate plan. Life is full of surprises.

No matter what age you are when you encounter your financial milestones, you need to have that “heart-to-heart” discussion with your partner and make sure you are in agreement about what will happen should one of you not come home tomorrow. Does life insurance pay off the mortgage, or start a college fund?

Living Trusts: Advantages

  1. Privacy: If you have a living trust, distribution of your assets remains confidential, but if your estate were to go to probate, they would be open for public discussion and possible challenge.
  2. Time: A trust is fast and avoids the 6-to 18-month delays of probate.
  3. Cost: Having your estate in a trust eliminates attorney fees and probate taxes.
  4. Flexibility: You can change or amend a revocable living trust at any time before your death, without a lawyer.
  5. Consolidation: A trust brings assets located in different states under the laws of a single state that you choose because it eliminates multi-state probate.
  6. Tax advantages: If you deed any property while you’re alive to your heirs, they may be taxed if they sell the house later. But there is generally no tax if the asset is passed via your trust after death.
  7. Cash flow: If you die without a will and your estate goes to probate, bank accounts and other similar assets are frozen until ownership is determined and title is transferred by attorneys and the court. Your family business cash flow is immediately controlled by probate attorneys. You can’t pay bills, you can’t collect rent checks, you can’t invoice your customers. Couldn’t this destroy the family business? A living trust gives your heirs immediate authority to continue operations. Bank accounts remain open, family investments continue uninterrupted, and income continues to flow to your business and/or beneficiaries.
  8. Streamlined: A living trust is lean in terms of accounting, administration, and minimal judicial review. For instance, after death, generally, the only tax requirement is that the successor trustee files a 1041 return within nine months.
  9. Pre-empts challenges: A living trust can successfully prevent challenges to distributions by disgruntled parties because you clarify exactly who is entitled to what – in advance. In a probate case, attorneys decide who is the next “owner” of “each asset.”

Real Estate Professionals

All professionals in the real estate industry are aware of the significance of title vesting. It is part of basic training. However, in an escrow or pending transaction the question about vesting is often unanswered. Clients are advised to seek outside counsel by all parties assisting with the transaction. Except the client is already mentally overloaded with issues and under financial pressure. The thought of expending more time to independently seek out yet another individual for advice and then sorting through the options is overwhelming to most clients. We have the solution for them. Send your clients to our site and let them explore for themselves the best way to hold title.

In today’s complex financial world, a living trust is the bare minimum for vesting. If privacy is a sensitive issue, add the real estate trust. Agents and brokers themselves know how important this is to provide a higher quality transaction. Give your clients peace of mind about their real property ownership for today and their heirs for tomorrow.

Revocable versus Irrevocable

By default in most states, all living trusts are revocable. This means that you – as the creator can amend, change or even revoke the trust at anytime. You can add or remove assets at anytime. You can remove and replace a trustee at anytime. You can add, amend or remove a beneficiary at anytime. It’s very flexible. However, once you’re dead, whatever is in writing, that’s it. How can a dead person revoke anything? It automatically becomes irrevocable.

In select cases the creator may decide by design to setup an irrevocable living trust. For example, grandma widow knows her health is getting bad. She only trusts her sister to manage her affairs and is determined to avoid family conflict over her assets. In this case, she states in writing that her living trust is irrevocable naming her sister as the trustee. This means no further changes even though she is still alive. This is one way people solidify their desires and instructions – an irrevocable living trust.

You can also get asset protection with an irrevocable trust. This is because you have relinquished legal ownership of those assets to your appointed trustee. However, you may still benefit from them – such as living in the house or receiving income.

If you have Medicaid on the planning horizon you might like to qualify one day? But a lifetime of assets will quickly spend down unless your net worth is fairly minimal. What you do is create that irrevocable living trust at least 30 months (in CA) prior to Medicaid application.

Charitable gifts and other tax related gifts from an estate are another reason for an irrevocable trusts. The paperwork can get quite involved yet is worthwhile given the tax benefits.

Civil versus Common Law Jurisdictions

In the state of Louisiana and many western European countries they operate with the Civil Law legal system. In 49 states and various other countries we operate on a Common Law legal system. The difference is important.

Civil Law (and Sharia) jurisdictions have a system of forced heirship. This restricts your ability to dispose of property upon death. Only a portion of your estate is freely transferable to whomever you choose. The remainder is automatically divided up among prescribed heirs. Any excessive gifts granted during your life are subject to clawback after death.

Common Law allows you freedom to dispose of property upon death. This is why people from Civil or Sharia Law countries relocate their assets. Yet know that physical (immovable) property like real estate is subject to the laws of where it resides. While financial assets (movable) property can exit country borders quite easily.

Benefits of an Estate Plan

  • Security for yourself while alive – an instrument of control
  • Security your family will continue after your death
  • Security in feeling remembered after death

Comparison: Living Trusts vs. Probate

Advantage/DisadvantageProbateLiving Trust
Eliminates Probate
Privacy of Your Affairs
Quick Distribution
Cost Controls
Consolidation of Assets
Cash Flow


Estate planning paperwork does have technical requirements. But if you can identify your assets and who you want to get them, creating an estate plan is relatively easy. As you know the hardest part is always – thinking.

Tap into the Unique Power of Trusts

To get the best asset privacy Learn more about asset privacy benefits you must have strategic guidance. We ask you key questions about context and goals. But only you can provide the answers. Once you work with us you’ll quickly understand why clients keep returning year after year. No one else has the depth or expertise with asset privacy except Trustarte. We’re here to personally assist you. Get the privacy your assets not only deserve, but need.

Investment advisers, attorneys, accountants, accredited investors, hedge fund managers, qualified purchasers, family offices and individuals seek out James. He designs very effective privacy solutions for them. These highly personalized relationships are essential for professional success.