Inter Vivos

Definition

Inter vivos, a Latin term meaning “between the living,” refers to a transfer or gift made during an individual’s lifetime. This legal term distinguishes such transactions from those made via a will or after death, known as testamentary transfers. Inter vivos transactions can apply to various forms of property, including real estate, cash, or other valuable items, and are often used in estate planning to reduce the tax burden or meet other familial or financial goals.

Examples

Gift of Real Estate: A parent transfers ownership of a house to their child during their lifetime.
Cash Gift: An individual gives significant sums of money to their children while still alive.
Living Trust: Establishing a trust for the benefit of family members that takes effect during the grantor’s lifetime.
Artwork Donation: Donating a valuable painting to a museum under an inter vivos agreement.

Frequently Asked Questions (FAQs)

What is the main purpose of an inter vivos gift?
- The main purpose is often to distribute assets according to the individual’s wishes during their lifetime, potentially for tax advantages, asset protection, or personal satisfaction.
Are inter vivos transfers irrevocable?
- Typically, yes. Once an inter vivos transfer is made, it cannot be undone without the consent of the recipient unless specific conditions were stipulated in the transfer agreement.
How do inter vivos gifts affect estate taxes?
- Inter vivos gifts can reduce the value of an estate, potentially lowering estate taxes. However, they may be subject to gift taxes, depending on the value and the jurisdiction’s laws.
What is the difference between inter vivos and testamentary transfers?
- Inter vivos transfers happen during an individual’s lifetime and are typically irrevocable, while testamentary transfers occur after death and are executed through a will or similar testamentary document.
Can inter vivos gifts be contested?
- Yes, similar to testamentary gifts, inter vivos gifts can be contested in court, typically on grounds such as lack of capacity, undue influence, or fraud.

Testamentary Transfer: A transfer of assets that occurs after the individual’s death, usually through a will or estate plan.
Living Trust: A trust created during the grantor’s lifetime, used to hold and manage assets for beneficiaries according to the grantor’s instructions.
Gift Tax: A tax imposed by the federal government on transfers of property by gift during the donor’s lifetime.
Irrevocable Trust: A trust that cannot be modified or terminated without the permission of the beneficiary.

Online Resources

References

Nolo. Estate Planning Basics, 8th Edition. Nolo Press, 2018.
IRS. Instructions for Form 709: Gift and Generation-Skipping Transfer Tax Return. https://www.irs.gov/pub/irs-pdf/i709.pdf

Suggested Books for Further Studies

“The Complete Book of Wills, Estates and Trusts” by Alexander A. Bove, Jr.
“Plan Your Estate” by Denis Clifford
“Estate Planning For Dummies” by N. Brian Caverly and Jordan S. Simon

Real Estate Basics: Inter Vivos Fundamentals Quiz

### What does the term inter vivos mean in a legal context? - [x] Between the living during one's lifetime - [ ] Property passed through a will - [ ] Asset transferred posthumously - [ ] Items held in escrow > **Explanation:** "Inter vivos" refers to transfers or gifts made between living individuals during their lifetimes. ### Are inter vivos gifts typically revocable or irrevocable? - [ ] Revocable - [ ] Depends on the state laws - [x] Irrevocable - [ ] Only revocable upon mutual agreement > **Explanation:** Inter vivos gifts are generally irrevocable; once given, the transfer cannot be reversed without the recipient's consent. ### What potential tax can apply to substantial inter vivos gifts? - [x] Gift tax - [ ] Estate tax - [ ] Income tax - [ ] Property tax > **Explanation:** Substantial inter vivos gifts can be subject to the gift tax, which is levied on the transfer of property by one individual to another while receiving nothing or less than full value in return. ### What is an advantage of making inter vivos gifts in estate planning? - [x] Reducing the taxable estate - [ ] Increasing property value - [ ] Avoiding all taxes - [ ] Creating testamentary trusts > **Explanation:** One advantage is reducing the taxable estate by distributing assets during the donor's lifetime, which can lower estate taxes. ### Which of the following can be considered an inter vivos transfer? - [ ] Stipulations in a will - [ ] Transfer of property via probate - [x] A cash gift given by a living parent to their child - [ ] Nomination of a legal guardian > **Explanation:** A cash gift given by a living parent to their child is an inter vivos transfer because it occurs during the parent's lifetime. ### Inter vivos is most commonly associated with what aspect of law? - [ ] Criminal law - [ ] Commercial law - [x] Estate planning - [ ] Corporate law > **Explanation:** Inter vivos is most commonly associated with estate planning, involving lifetime transfers of assets. ### What kind of trust takes effect during the grantor's lifetime as an inter vivos arrangement? - [x] Living trust - [ ] Testamentary trust - [ ] Charitable remainder trust - [ ] Constructive trust > **Explanation:** A living trust is established and takes effect during the grantor's lifetime, making it an inter vivos arrangement. ### What is the term for a gift made through a will after death? - [ ] Living trust - [ ] Inter vivos - [x] Testamentary transfer - [ ] Quasi-inter vivos > **Explanation:** A testamentary transfer is the term for a gift made through a will, becoming effective only after death. ### Are gifts made via inter vivos transfers considered part of the donor's estate after their death? - [ ] Yes, always - [ ] Only under certain conditions - [x] No, they are not - [ ] Only if specified in the will > **Explanation:** Gifts made via inter vivos transfers are not considered part of the donor's estate after their death, as they have already been transferred during their lifetime. ### Can inter vivos gifts be challenged in court? - [ ] No, they are final - [ ] Rarely, only in extreme cases - [ ] Only if the recipient consents - [x] Yes, on grounds such as lack of capacity or undue influence > **Explanation:** Inter vivos gifts can be contested in court, particularly on grounds like lack of capacity, undue influence, or fraud.