Intervivos Trust

An intervivos trust is an agreement where the person creating the trust (referred to variously as the grantor, settlor, or trustor) during the creator’s life appoints a trustee to receive assets for the benefit of the creator and/or one or more beneficiaries.  A written agreement should be drafted by an attorney to identify the roles, duties and powers of the parties.   It will be signed by both the creator and the trustee.  

An intervivos trust is often created for one or more of the following purposes: (a) avoiding probate by having assets owned by the trust, not the creator, (b) providing for the post-death disposition directives in the trust rather than in a will, (c) in addition to a will, facilitating a means of limiting the impact of estate taxes for subsequent beneficiaries, or (d) holding assets for the benefit of children until they reach a specified age or until a stated triggering event occurs.

The intervivos trust may be either revocable or irrevocable, and either funded or unfunded.  An intervivos trust is often referred to as a "living trust".

The creation and administration of the intervivos trust occurs outside the general supervision of the Probate Court.  However, the Court may assume limited jurisdiction over the trust for purposes of a addressing specifically indentified issues relating to the trust language or the administration.  This jurisdiction is invoked through the filing of a Motion to Assume Jurisdiction for a specifically described purpose that is presented to the Court by a party having an interst in the trust.  The primary action then is commenced as a civil action with the filing of a Complaint with the Court.  This proceeding will be governed by the Rules of Civil Procedure and at the conclusion of the litigation the Court's involvement wiht the intervivos trust ends, unless jurisdiction is expressly retained. 

Advantages of Using an Intervivos Living Trust

  1. Privacy:  A trust agreement is a private document and becomes public only in limited situations where persons with standing seek interpretation, modification, reformation, supervision ,or termination from the Probate Court.
  2. Speed of Transfer:  Assets may be transferred into and out of the trust without the need for Court approval.
  3. Avoidance of Probate Expenses:  An intervivos trust will not typically require probate court involvement; therefore, court costs and statutory fees will be avoided.

Disadvantages of Using an Intervivos Trust

  1. Effort to Fund Trust:  An intervivos trust must be fully funded with all the settlor’s assets while the settlor is living or through other non-probate transfer mechanisms in order to fully avoid probate.  Assets acquired by the settlor after the trust is established must be transferred to the trustee prior to death, or by non-probate transfer mechanisms to avoid having to probate them.
  2. Expense:  Cost of drafting and funding a trust is generally greater than the cost of preparing a will and the cost of transferring assets to the trust is money spent prior to death, rather than post-death.
  3. Lack of Oversight:  With privacy, generally there is no readily available forum for the trustee or the beneficiaries to obtain resolution of disputes or direction.  With privacy, and without independent oversight and supervision the specter of suspicion may become burdensome for the trustee and problematic for the beneficiaries.  

If there is interest in creating an intervivos trust, consultation is recommended with an attorney knowledgeable in trust drafting and administration, estate planning, taxation, and probate matters.

Special Needs Trust

A Special Needs Trust can be established by the Court to receive assets belonging to, or are otherwise payable to, a minor or an incompetent with special needs.  To do so, the Probate Court must make a determination that establishing the trust will be in the minor’s or ward’s best interest.

Typically, a guardian of the estate is first appointed for the minor or incompetent and then the guardian can apply for the approval of the creation of the Special Needs Trust.  The purpose of the Special Needs Trust is to hold the assets in a manner whereby those assets are not counted as “available resources” of the minor or ward when determining the individual’s eligibility for governmental need-based assistance.

The Special Needs Trust will be administered and supervised as any other trust created through the Probate Court.  A bond will be required for the Trustee, unless the bond is waived according to law through the deposit of the assets of the trust in a restricted access l depository account accessible only with express approval of the Court, the trustee is a trust company, or the trust asset is solely a structured settlement contract that is not in a payment status (bond will be required when payments commence).

The applicant must have an Attorney.

Items necessary to Create a Special Needs Trust –

  1. An udigned copy of the proposed Special Needs Trust in DRAFT form; the trust must comply with Local Rule 78.7;
  2. Copy of Driver’s License or Government issued picture ID of the Applicant;
  3. Completion of forms required for Court's background check of Applicant;
  4. The base court cost deposit is one hundred twenty dollars ($120.00);
  5. Application for Appointment of Trustee and Trustee's Acceptance;
  6. Oath of Trustee (to be executed in the presence of a judicial officer of the Court); and
  7. Instructions for Service with list of names and addresses of Next of Kin of beneficiary and proposed Trustee.


Frequently Asked Questions

What Involvement does the Court have when a Disability Trust is Created from Funds Belonging to the Disabled Person (Adult or Minor)?
A Wholly Discretionary Trust, a Supplemental Services Trust, or a Medicaid Payback Trust can be created by third parties using their own funds without probate court involvement, unless created through a will as a form of a testamentary trust.

If a Medicaid Payback Trust (other than a Pooled Medicaid Payback Trust) is being created by the guardian of the estate of an individual under guardianship, or for a disabled minor when the funding is coming from the minor’s assets (inheritance, gift, life insurance proceeds, annuity benefits from a deceased person or recoveries from a personal injury claim), then the approval of the probate court MUST be obtained.  It is intended to hold and expend assets of the beneficiary in such a way that the beneficiary’s life is enriched and enhanced without disqualifying the beneficiary from eligibility for governmental benefits.  Expenditures are typically made for items and services not paid for by governmental assistance - items over and above the necessities of life.  The Court reviews the terms of the trust to assure it is within the statutory guidelines, approves the selected trustee, and supervises the trustee's administration of the trust.