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.
Keywords: Kentucky Sprinkling Trust, Crummy Trust Agreement, children, granter's life, surviving spouse, granter's death The Kentucky Sprinkling Trust for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death, commonly referred to as the Crummy Trust Agreement, is a legal arrangement that allows the granter to provide financial support and inheritance for their children during their lifetime, as well as ensuring the well-being of their surviving spouse and children after the granter's passing. This type of trust offers several variations to suit specific circumstances, known as different types of Kentucky Sprinkling Trusts. 1. Kentucky Sprinkling Trust for Children During Granter's Life: This type of trust is established by the granter during their lifetime to make provisions for the financial needs and support of their children. The granter can fund the trust with assets such as cash, property, or investments, which will be managed by a trustee for the benefit of the children. The trust's terms outline how the funds can be used, ensuring that the children receive proper care and education while maintaining financial security. 2. Kentucky Sprinkling Trust for Surviving Spouse and Children after Granter's Death: This trust type is designed to safeguard the financial well-being of both the surviving spouse and the children after the granter's demise. It enables the granter to allocate a portion of their estate to the trust, which will be managed by a trustee. The surviving spouse and children are the beneficiaries of the trust, ensuring they have the necessary financial support and protection even after the granter's passing. 3. Crummy Trust Agreement: The Crummy Trust Agreement is a unique feature that adds an element of flexibility to the Kentucky Sprinkling Trust. The Crummy power allows the beneficiaries to withdraw a certain amount of money from the trust within a specified timeframe. By utilizing this power, which is often limited to a brief period, the trust gains certain tax advantages, such as qualifying for the annual gift tax exclusion. It provides an opportunity for the beneficiaries to access funds when needed, while still preserving the assets in the trust for their long-term benefit. In summary, the Kentucky Sprinkling Trust for Children During Granter's Life, and for Surviving Spouse and Children after Granter's Death Crummyey Trust Agreement, offers a comprehensive solution for estate planning, ensuring financial security and support for children and surviving spouses. The different types of Kentucky Sprinkling Trusts, including those established during the granter's life and those activated after the granter's death, provide flexibility and customization options to meet unique family needs. Adding the Crummy Trust Agreement to the strategy further optimizes tax benefits and access to funds within specified limits.
