What is an "inter vivos" trust?

An "inter vivos" trust, also known as a living trust, is indeed a trust created during the grantor's lifetime. This type of trust allows the grantor to manage their assets and allocate their distribution while they are still alive, facilitating estate planning and management of assets in a way that can avoid probate proceedings after death.

By establishing an inter vivos trust, individuals can maintain control over their assets, provide for their needs, and designate beneficiaries, all while enjoying the benefits of a streamlined transfer of assets upon their passing. This contrasts significantly with a testamentary trust, which is created through a will and comes into effect only after the grantor’s death.

The other options do not accurately describe an inter vivos trust. A trust created after the death of the grantor would refer to a testamentary trust, and a trust that can only be revoked does not define the key characteristic of an inter vivos trust, as it may be created as either revocable or irrevocable. Lastly, the notion that a trust is not recognized by the state is incorrect, as inter vivos trusts are legally recognized and commonly utilized in estate planning. Understanding the definition and function of an inter vivos trust is crucial for grasping broader estate planning concepts.