Definition – Inter vivos versus testamentary trusts
November 10, 2009
The terms above refer to two major categories of trusts. An inter vivos trust is a trust that was created during the lifetime of the Trust Grantor/Settlor. A testamentary trust is set up upon the death of the Trust Grantor/Settlor, typically in a Last Will.
Some distinctions are that an inter vivos trust may be freely revocable by the Grantor/Settlor, whereas the testamentary trust is irrevocable. The inter vivos trust may be set up to accomplish asset management, incapacity planning, or Medicaid planning for the Settlor/Grantor. A testamentary trust is useful to protect the Settlor/Grantor’s eventual beneficiaries from dissipating their inheritance through immaturity, creditors’ claims, divorce, and the like.
