An irrevocable trust established to qualify contributions for the annual federal gift tax exclusion for gifts of a present interest. The trust is named Crummey because of a case involving a family named Crummey. The trust contains Crummey Powers, enabling a beneficiary to withdraw assets contributed to the trust for a limited period of time.
The Louisiana Sprinkling Trust for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death, also known as the Crummy Trust Agreement, is a type of irrevocable trust that allows the granter to gift funds to their children while maintaining control over the distribution of those funds. This trust provides a way for the granter to provide financial support to their children during their lifetime and ensures that their surviving spouse and children are taken care of after the granter's death. During the granter's life, the Louisiana Sprinkling Trust allows them to make annual gifts to the trust, which are considered present-interest gifts. The trust includes a Crummy provision, named after the case that established it, which grants the beneficiaries the right to withdraw the gifted funds for a limited time period, typically 30 days. This provision qualifies the gift for the annual exclusion from gift tax. This trust arrangement offers several benefits for both the granter and the beneficiaries. The granter can control the distribution of funds by specifying the terms and conditions under which the beneficiaries can access the trust assets. Additionally, the trust assets are protected from creditors, divorce, and mismanagement by the beneficiaries. After the granter's death, the trust continues for the benefit of the surviving spouse and children. The trust assets are managed by a designated trustee, who has the discretion to distribute funds to the beneficiaries for their health, education, maintenance, and support. This ensures that the surviving spouse and children are financially supported while allowing the trustee to make decisions based on the circumstances and needs of the beneficiaries. There are different types of Louisiana Sprinkling Trusts, including: 1. Fixed Percentage Sprinkling Trust: This type of trust allows the granter to distribute a fixed percentage of the trust assets to the beneficiaries during the granter's life and after their death. The percentage can be adjusted based on the granter's preferences and the needs of the beneficiaries. 2. Discretionary Sprinkling Trust: This trust provides the trustee with the discretion to determine the amount and timing of the distributions to the beneficiaries. The trustee evaluates the beneficiaries' needs and circumstances and makes distribution decisions accordingly. 3. Directed Sprinkling Trust: In this type of trust, the granter designates a third party, such as a trusted advisor or family member, to act as a co-trustee or distribution advisor. This third party collaborates with the trustee to make distribution decisions, ensuring that the granter's intentions are followed. In conclusion, the Louisiana Sprinkling Trust for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement is a versatile estate planning tool that allows the granter to provide financial support to their loved ones while maintaining control over the distribution of assets. Through different types of trusts, the granter can tailor the trust arrangement to their specific goals and the needs of their beneficiaries.
