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.
Hawaii Sprinkling Trust for Children During Granter's Life: The Hawaii Sprinkling Trust for Children During Granter's Life, also known as the Crummy Trust, is a unique estate planning tool that allows parents or granters to transfer assets to their children during their lifetime while maintaining some control over the distribution of those assets. This irrevocable trust is established to benefit multiple children and offers flexibility in how and when the assets are distributed. The Crummy Trust operates by granting each child the ability to withdraw a limited amount of money, typically up to the annual gift tax exclusion amount, from the trust for a certain period after each contribution is made. This withdrawal power is time-limited, usually for 30 days, to ensure that the contribution qualifies as a present interest gift and falls within the annual gift tax exclusion. The granter funds the trust by making regular contributions, which are typically made in the form of cash or marketable securities. These contributions to the trust are not taxed as gifts, as long as they fall within the annual gift tax exclusion amount. The trust assets are managed by a designated trustee, who can be a family member, a trusted friend, or a professional entity. Hawaii Sprinkling Trust for Surviving Spouse and Children after Granter's Death: The Hawaii Sprinkling Trust for Surviving Spouse and Children after Granter's Death is a variation of the Crummy Trust that comes into effect after the granter's demise. This type of trust allows for the seamless transfer of assets to the granter's surviving spouse and children while providing the granter with control over the distribution of those assets both during their lifetime and after their death. Under this trust agreement, the surviving spouse and children become beneficiaries and are entitled to receive income and/or principal from the trust based on the granter's instructions. These instructions can be broad or specific, granting the trustee discretion on how and when to distribute funds. The trustee's role is crucial as they have the responsibility to manage, invest, and distribute the trust assets in accordance with the provisions outlined by the granter. The Hawaii Sprinkling Trust for Surviving Spouse and Children after Granter's Death offers several advantages, including asset protection, continuity of control, and potential tax benefits. By incorporating this trust into their estate plan, the granter can ensure that their surviving spouse and children are provided for while preserving their intention and vision for the distribution of assets. Overall, the Hawaii Sprinkling Trust for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement, provides a valuable estate planning tool for individuals looking to make intergenerational transfers while maintaining control and flexibility over the distribution process.
