Crummey Trust Lawyer in Los Angeles

What is a Crummey trust?

The Crummey trust was named after Clifford Crummey. He was the first taxpayer to successfully use this technique. The courts ruled in favor of the family who used this method against the Internal Revenue Service (IRS). A Crummey trust is used to solve the problem of parents who place gifts of money into a trust for their child and are concerned that it will be used before the child has reached a mature and capable age. This takes place when parents wish to make lifetime gifts to their children to save on estate taxes.

The parents can give up to a maximum of $13,000 each year, a number that will increase with inflation. The parents can set an age in which their child can use the money by setting up a formal trust. Gifts would then be made to the trust and the trustee would invest the money. If you would like to know whether this method will work for you and your family, speak with a Los Angeles trust attorney today!

Access Money Within the 30-Day Window

This trust is for the benefit of a minor and the parents wishing to save on estate taxes. It is a trust in which gifts are made in a manner that qualifies them for an exclusion of both unified gift and estate tax. The recipient, or minor, is allowed a window of 30 days in which the money can be accessed after it is gifted. This is because the recipient must have a present interest in the gift, meaning that it can be accessed and spent immediately. This counts toward the most recent gift.

After the 30 days is passed, the money is placed into the trust and is given withdrawal rules. These rules include the age at which the child can have full access to the money in the trust. Crummey trusts continue to be an excellent option for families who would like to make gifts to their children in order to save on estate taxes. Contact our Los Angeles trust attorney today for more information!

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