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 Arkansas 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, offers an effective estate planning tool for individuals looking to provide financial support to their children and spouse both during and after the granter's life. This trust agreement allows for the controlled distribution of assets and offers various benefits and flexibility to the granter. The main purpose of the Arkansas Sprinkling Trust for Children During Granter's Life is to provide financial assistance to the granter's children while they are still alive. This trust allows the granter to distribute funds to the children at different stages of their life or for specific needs, such as education, healthcare, or other important expenses. By doing so, the granter can ensure that the children receive financial support when it is most needed. On the other hand, the Arkansas Sprinkling Trust for Surviving Spouse and Children after Granter's Death ensures the continued financial well-being of both the surviving spouse and the children after the granter passes away. This trust agreement allows for the transfer of assets and provides reliable financial resources to the surviving spouse and children, thus ensuring their continued support and stability even in the absence of the granter. The Crummy Trust Agreement, named after the landmark case of Crummy v. Commissioner in 1968, involves the utilization of annual exclusion gifts, which allow the granter to distribute a certain amount of assets to the trust each year without incurring gift tax. This type of trust involves giving the beneficiaries the right to withdraw the gifts for a limited period, usually 30 days, after which the assets become part of the trust. The Crummy provision is essential in ensuring that the trust assets retain their tax advantages while still providing financial support to the beneficiaries. In conclusion, the Arkansas Sprinkling Trust for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement offers a comprehensive and flexible estate planning solution. By utilizing this trust agreement, individuals can ensure the financial stability and support of their loved ones both during and after their lifetime.
