What is A Crummey Trust?

Even though the word 'crummey' has taken on a not so positive meaning in the English language, make no mistake, a Crummey Trust has many benefits as part of your estate litigation.

A Crummey Trust is an irrevocable trust that is usually intended for the benefit of a child. The child would be able to make withdrawals from the trust from the monetary contributions made to it. They can do this for a short period of time, usually around 45 days, from the time the contribution was made. The Trustee must give notice to the beneficiary that the trust funds are available and can be withdrawn either partially or in whole by the specific date stipulated by the trust. This type of transfer qualifies under the Internal Revenue Code Section 2503(b) for the annual gift exclusion. But once the withdrawal period ends, that contribution will be subject to the trust terms.

A Crummey Trust is a great way to make gifts to your children by taking advantage of those annual gift tax exclusions.

There are a lot of technicalities involved with setting up this and other types of irrevocable trusts and it would not be wise to take this task upon yourself without professional help. Contact the knowledgeable Trust Attorneys at The Law Offices of David A. Shapiro who will make sure all of your trust needs are in order and are legally executable.

*This blog entry was not written by an Attorney and should not be constituted as professional legal advice.

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