District of Columbia Irrevocable Funded Life Insurance Trust where Beneficiaries Have Crummey Right of Withdrawal with First to Die Policy with Survivorship Rider

• Category: Trusts - Irrevocable
• State: Multi-State
• Control #: US-0675BG
• Format: Word; Rich Text

Description

An irrevocable trust is a trust that cannot be modified or terminated without the permission of the beneficiary. In most states, a trust will be deemed irrevocable unless the grantor specifies otherwise. Once the grantor has transferred assets into the tr The District of Columbia Irrevocable Funded Life Insurance Trust where Beneficiaries Have Crummy Right of Withdrawal with First to Die Policy with Survivorship Rider is a type of trust specifically designed for the residents of the District of Columbia. This trust combines the benefits of an irrevocable life insurance trust and a first to die policy with a survivorship rider. In this trust, the granter (the person creating the trust) transfers a life insurance policy, which covers two individuals, to the trust. The policy pays out the death benefit upon the death of the first insured person (the insured couple), and the survivorship rider ensures that the policy remains in force until the death of the second insured person. One unique feature of this trust is the inclusion of the "Crummy Right of Withdrawal" for the beneficiaries. This right allows the beneficiaries to withdraw a certain amount of money from the trust annually for a specified period, typically 30 days. This withdrawal right makes the contributions to the trust eligible for the annual gift tax exclusion, reducing the potential tax burden for the granter. By combining the elements of an irrevocable trust, first to die policy, survivorship rider, and the Crummy Right of Withdrawal, this trust offers several advantages to the granter and beneficiaries. These advantages include: 1. Estate tax reduction: By removing the life insurance policy from the granter's estate, the trust helps reduce the estate tax liability upon the granter's death. 2. Survivorship protection: The first to die policy with a survivorship rider ensures that the surviving spouse is financially protected after the death of the first insured person, providing financial stability during a difficult time. 3. Liquidity for the beneficiaries: The Crummy Right of Withdrawal allows the beneficiaries to access funds from the trust when needed, providing liquidity for immediate financial requirements. 4. Gift tax exclusions: The trust structure allows the granter to take advantage of the annual gift tax exclusion by making contributions through the Crummy withdrawal rights. Different variations of this type of trust may include variations in the Crummy withdrawal provisions, such as different withdrawal amounts, periods, or frequency. Additionally, the specific terms and conditions of the life insurance policy, including the coverage amount, premium payments, and riders, may vary depending on the individual's requirements and goals. In conclusion, the District of Columbia Irrevocable Funded Life Insurance Trust where Beneficiaries Have Crummy Right of Withdrawal with First to Die Policy with Survivorship Rider provides a powerful estate planning tool for residents of the District of Columbia. It combines the benefits of an irrevocable trust, first to die policy with survivorship rider, and the Crummy withdrawal rights, offering estate tax reduction, survivorship protection, liquidity, and gift tax exclusions.

The District of Columbia Irrevocable Funded Life Insurance Trust where Beneficiaries Have Crummy Right of Withdrawal with First to Die Policy with Survivorship Rider is a type of trust specifically designed for the residents of the District of Columbia. This trust combines the benefits of an irrevocable life insurance trust and a first to die policy with a survivorship rider. In this trust, the granter (the person creating the trust) transfers a life insurance policy, which covers two individuals, to the trust. The policy pays out the death benefit upon the death of the first insured person (the insured couple), and the survivorship rider ensures that the policy remains in force until the death of the second insured person. One unique feature of this trust is the inclusion of the "Crummy Right of Withdrawal" for the beneficiaries. This right allows the beneficiaries to withdraw a certain amount of money from the trust annually for a specified period, typically 30 days. This withdrawal right makes the contributions to the trust eligible for the annual gift tax exclusion, reducing the potential tax burden for the granter. By combining the elements of an irrevocable trust, first to die policy, survivorship rider, and the Crummy Right of Withdrawal, this trust offers several advantages to the granter and beneficiaries. These advantages include: 1. Estate tax reduction: By removing the life insurance policy from the granter's estate, the trust helps reduce the estate tax liability upon the granter's death. 2. Survivorship protection: The first to die policy with a survivorship rider ensures that the surviving spouse is financially protected after the death of the first insured person, providing financial stability during a difficult time. 3. Liquidity for the beneficiaries: The Crummy Right of Withdrawal allows the beneficiaries to access funds from the trust when needed, providing liquidity for immediate financial requirements. 4. Gift tax exclusions: The trust structure allows the granter to take advantage of the annual gift tax exclusion by making contributions through the Crummy withdrawal rights. Different variations of this type of trust may include variations in the Crummy withdrawal provisions, such as different withdrawal amounts, periods, or frequency. Additionally, the specific terms and conditions of the life insurance policy, including the coverage amount, premium payments, and riders, may vary depending on the individual's requirements and goals. In conclusion, the District of Columbia Irrevocable Funded Life Insurance Trust where Beneficiaries Have Crummy Right of Withdrawal with First to Die Policy with Survivorship Rider provides a powerful estate planning tool for residents of the District of Columbia. It combines the benefits of an irrevocable trust, first to die policy with survivorship rider, and the Crummy withdrawal rights, offering estate tax reduction, survivorship protection, liquidity, and gift tax exclusions.