I once sat with a client who owned a successful multi-generational business in Brooklyn. His greatest fear wasn’t death, but the chaos that would follow. He pictured his business—his life’s work—frozen for months while his will went through Surrogate’s Court. Payroll would be missed. Contracts would stall. His family would be left in limbo, waiting for a judge’s permission to run the company he built for them. This scenario is all too common, and it’s the exact problem a properly structured inter vivos trust is designed to solve.
What “Inter Vivos” Means for Your Estate
The term sounds formal, but the concept is straightforward. “Inter vivos” is Latin for “among the living.” An inter vivos trust—more commonly called a living trust—is a legal entity you create and fund while you are alive. You, the grantor, transfer ownership of your assets into the trust. You typically name yourself as the initial trustee, so you retain full control over those assets. You can buy, sell, invest, and manage them just as you did before.
The key difference is that the trust, not you personally, holds legal title. This distinction is critical. When you pass away, the assets are already held by the trust. There is nothing to transfer through your will, and therefore nothing for the Surrogate’s Court to administer in a probate proceeding. Your successor trustee—a person or institution you chose—steps in immediately to manage or distribute the assets according to the instructions you left in the trust document.
This is fundamentally different from a testamentary trust, which is a trust created within a will and only comes into existence after your death and after the will has been probated. With a living trust, the transfer of control is seamless and private.
The Practical Benefits: Beyond Probate Avoidance
Avoiding the time and expense of probate is the most cited reason for creating a living trust, and for good reason. The process can easily take nine months to a year or more in New York, and all the documents filed—including the will and an inventory of assets—become public record. A living trust keeps your family’s financial affairs private.
But the benefits extend beyond that. A living trust is also a powerful tool for managing incapacity. If you become unable to manage your own affairs due to illness or injury, your designated successor trustee can step in to manage the trust assets for your benefit. This can often avoid the need for a court-appointed conservator, which is a public, costly, and often stressful process for families.
Stewardship. That is the core function of a trustee. The person you name as your successor trustee has a profound responsibility. They are bound by a fiduciary duty to act in the best interests of the beneficiaries and follow your instructions to the letter. Their management of investments, for instance, is governed by a strict legal standard under New York’s Prudent Investor Act, codified in EPTL § 11-2.3. This requires them to exercise reasonable care, skill, and caution—a standard we discuss at length with every client considering who to appoint.
Is a Living Trust Always the Right Approach?
While a revocable living trust is an excellent instrument for many, it is not a cure-all. We must be clear about what it does not do. A standard revocable living trust does not, on its own, protect your assets from creditors. Because you retain control over the assets and can revoke the trust at any time, the law considers those assets to still be yours for creditor purposes.
It also doesn’t eliminate the need for a will. You will still need what we call a “pour-over” will. This simple will acts as a safety net, directing that any assets you forgot to title in the name of the trust during your lifetime are “poured over” into the trust upon your death. Those assets will have to go through probate, but the will ensures they ultimately end up where you intended, governed by the terms of your trust.
The decision to create a living trust is a deliberate one, based on the nature of your assets, the needs of your family, and your specific goals for your legacy. It requires more administrative work upfront than a simple will, as assets must be formally retitled into the name of the trust. But for many families, the continuity, privacy, and control it provides are well worth the effort.
The first step is not to draft a document, but to have a conversation. We begin by helping you inventory your assets and articulate your long-term goals for your family. Only then can we determine if an inter vivos trust is the right structure to carry that vision forward.
