Indiana Crummey Trust Agreement for Benefit of Child with Parents as Trustors

• Category: Trusts - Bypass
• State: Multi-State
• Control #: US-0641BG
• Format: Word; Rich Text

Description

In a Crummey trust, parents place gift money into a trust and give their child (or other recipient) the right to withdraw the amount of each gift for up to 30 days after each gift is made. Since the withdrawal right begins immediately after the gift is ma The Indiana Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a legal document that establishes a unique estate planning strategy in Indiana. This specific type of trust agreement allows parents to transfer assets or property to their minor child while maintaining a level of control and protection. The Indiana Crummy Trust Agreement is named after a legal case known as Crummy v. Commissioner, and it is designed to take advantage of certain tax benefits outlined in the Internal Revenue Code. By creating this trust agreement, parents can make substantial gifts to their child while utilizing the annual gift tax exclusion. This type of trust agreement typically involves the following key components: 1. Trust or(s): The parents or legal guardians who create the trust and transfer assets or property to it for the benefit of their child. 2. Child Beneficiary: The minor child who will ultimately receive the assets held within the trust at a specified age or upon certain triggering events. 3. Trustee: An individual or entity appointed to administer and manage the trust according to the terms set forth in the trust agreement. 4. Crummy Withdrawal Rights: A significant aspect of this trust is the inclusion of "Crummy powers," also known as withdrawal rights, which provides the child with the opportunity to withdraw a limited portion of the contributed assets within a specific timeframe. 5. Annual Gift Tax Exclusion: By incorporating Crummy powers, the trust contributions made by the parents can fall within the annual gift tax exclusion limit, thereby minimizing or eliminating potential gift tax obligations. There are several variations or types of Indiana Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees, depending on specific circumstances and desires. Some common types include: 1. Fixed-Term Crummy Trust: This trust agreement specifies a specific age or date when the child will receive the trust assets outright, such as turning 25 years old or upon college graduation. 2. Discretionary Crummy Trust: This type of trust allows the trustee to distribute trust assets to the child based on their discretion, considering factors such as the child's needs, education, health, and overall well-being. 3. Special Needs Crummy Trust: This variation is designed to provide ongoing financial support for a child with special needs, ensuring that they can maintain eligibility for government benefits. 4. Testamentary Crummy Trust: Unlike the typical revocable living trust, this variation is created within a will and only takes effect upon the death of the trustees. It allows the parents to include provisions for the ongoing management and distribution of assets for the child's benefit. In conclusion, the Indiana Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a powerful estate planning tool that ensures the controlled distribution of assets to a minor child while considering tax implications. With its various types and customizable features, this trust agreement offers flexibility and peace of mind to parents seeking to secure their child's financial future.

The Indiana Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a legal document that establishes a unique estate planning strategy in Indiana. This specific type of trust agreement allows parents to transfer assets or property to their minor child while maintaining a level of control and protection. The Indiana Crummy Trust Agreement is named after a legal case known as Crummy v. Commissioner, and it is designed to take advantage of certain tax benefits outlined in the Internal Revenue Code. By creating this trust agreement, parents can make substantial gifts to their child while utilizing the annual gift tax exclusion. This type of trust agreement typically involves the following key components: 1. Trust or(s): The parents or legal guardians who create the trust and transfer assets or property to it for the benefit of their child. 2. Child Beneficiary: The minor child who will ultimately receive the assets held within the trust at a specified age or upon certain triggering events. 3. Trustee: An individual or entity appointed to administer and manage the trust according to the terms set forth in the trust agreement. 4. Crummy Withdrawal Rights: A significant aspect of this trust is the inclusion of "Crummy powers," also known as withdrawal rights, which provides the child with the opportunity to withdraw a limited portion of the contributed assets within a specific timeframe. 5. Annual Gift Tax Exclusion: By incorporating Crummy powers, the trust contributions made by the parents can fall within the annual gift tax exclusion limit, thereby minimizing or eliminating potential gift tax obligations. There are several variations or types of Indiana Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees, depending on specific circumstances and desires. Some common types include: 1. Fixed-Term Crummy Trust: This trust agreement specifies a specific age or date when the child will receive the trust assets outright, such as turning 25 years old or upon college graduation. 2. Discretionary Crummy Trust: This type of trust allows the trustee to distribute trust assets to the child based on their discretion, considering factors such as the child's needs, education, health, and overall well-being. 3. Special Needs Crummy Trust: This variation is designed to provide ongoing financial support for a child with special needs, ensuring that they can maintain eligibility for government benefits. 4. Testamentary Crummy Trust: Unlike the typical revocable living trust, this variation is created within a will and only takes effect upon the death of the trustees. It allows the parents to include provisions for the ongoing management and distribution of assets for the child's benefit. In conclusion, the Indiana Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a powerful estate planning tool that ensures the controlled distribution of assets to a minor child while considering tax implications. With its various types and customizable features, this trust agreement offers flexibility and peace of mind to parents seeking to secure their child's financial future.