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 South Dakota 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 legal arrangement designed to provide financial support and protection for beneficiaries in South Dakota. This type of trust allows the granter to distribute assets during their lifetime to children, while also ensuring that the surviving spouse and remaining children are taken care of after the granter's death. The Crummy Trust Agreement is named after Clifford Crummy, a taxpayer involved in a landmark legal case that established the concept of the Crummy power. This power allows beneficiaries to withdraw gifted funds for a limited period, typically 30 or 60 days, before they become part of the trust. By utilizing the Crummy power, the trust qualifies for the annual gift tax exclusion. There are different variations of the South Dakota Sprinkling Trust for Children During Granter's Life and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement, each tailored to meet the specific needs and objectives of the granter. Some examples include: 1. Irrevocable Crummy Trust: This type of trust cannot be altered or terminated by the granter once it is established. It provides a level of protection against estate taxes and ensures the assets are distributed according to the granter's wishes. 2. Testamentary Crummy Trust: Created as part of the granter's will, this trust becomes effective upon the granter's death. It allows the granter to provide for the surviving spouse and children by specifying the distribution of assets. 3. Dynasty Crummy Trust: This trust is designed to span multiple generations, preserving wealth and minimizing estate taxes. It provides for a distribution strategy that supports beneficiaries during their lifetimes, even after the granter's death. 4. Special Needs Crummy Trust: Tailored for individuals with disabilities, this type of trust allows the granter to set aside funds for the care and support of a special needs child, ensuring continued eligibility for government benefits. 5. Revocable Crummy Trust: Unlike an irrevocable trust, this type of trust can be modified or revoked by the granter during their lifetime. It provides flexibility while still offering potential tax benefits. In summary, the South Dakota Sprinkling Trust for Children During Granter's Life and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement offers a strategic and flexible approach to estate planning, allowing the granter to provide for their family's financial well-being while minimizing tax liabilities. By utilizing different types of Crummy trusts, individuals can tailor their estate plans to address their specific circumstances and goals.
