Which legal term refers to a trust created while the settlor is alive?

The term that appropriately describes a trust created while the settlor is alive is known as an inter vivos trust. This type of trust comes into effect during the lifetime of the settlor and allows them to transfer assets into the trust while still maintaining control over those assets. The primary purpose of an inter vivos trust is often to manage assets efficiently, avoid probate, and provide for beneficiaries both during the settlor's lifetime and after their death.

In contrast, a testamentary trust is established through a will and only takes effect upon the death of the settlor. This means it is not created while the settlor is alive, which differentiates it from an inter vivos trust. A revocable trust is a type of inter vivos trust, but the term itself is broader, focusing specifically on the settlor's ability to modify or revoke the trust at any time during their lifetime. Constructive trusts, on the other hand, are not created by the settlor's intent but are imposed by a court to address situations of unjust enrichment or fraud, making them irrelevant to the definition of a trust created while the settlor is alive. Thus, the most accurate term for a trust established during the lifetime of the settlor is indeed the inter vivos trust.