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 Pennsylvania 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 an estate planning tool that allows individuals in Pennsylvania to provide financial support for their children during their lifetime and after their death. This trust agreement is designed to take advantage of the annual gift tax exclusion and provide flexibility in distributing assets to beneficiaries. In a Pennsylvania Sprinkling Trust during the granter's life, the granter can transfer assets into the trust and make annual contributions, taking advantage of the gift tax exclusion. The trust is managed by a trustee, who has the authority to distribute funds to the children as needed, within the guidelines set by the granter. The primary goal is to support the children financially while minimizing the tax implications. After the granter's death, the Pennsylvania Sprinkling Trust becomes a source of financial support for the surviving spouse and children. The assets in the trust are distributed according to the terms set in the Crummy Trust Agreement. This agreement can outline specific amounts or percentages to be distributed to each beneficiary. Different types of Pennsylvania Sprinkling Trusts for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement may include: 1. Irrevocable Life Insurance Trust (IIT): This type of trust is designed to hold life insurance policies and provide financial support to the beneficiaries, typically the surviving spouse and children, after the granter's death. 2. Charitable Remainder Trust (CRT): A CRT allows the granter to donate assets to charity while retaining an income stream for themselves or their beneficiaries during their lifetime. After the granter's death, the remaining assets can be distributed to the surviving spouse and children. 3. Qualified Personnel Residence Trust (PRT): With a PRT, the granter transfers their primary residence or vacation home into the trust, retaining the right to live in the property for a specified period. After the granter's death, the property passes to the surviving spouse and children according to the Crummy Trust Agreement. In conclusion, the Pennsylvania Sprinkling Trust for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement is a valuable estate planning tool that provides financial support to beneficiaries while minimizing tax implications. Different variations of this trust, such as the IIT, CRT, and PRT, offer additional flexibility and benefits to meet the unique needs and goals of the granter.
