Maryland 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 Maryland Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees: A Maryland Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a legal tool used for estate planning in Maryland. This type of trust allows parents to create a trust fund for the benefit of their child, providing financial security and control over assets while minimizing taxes and potential probate issues. The Crummy Trust is named after the court case Crummy v. Commissioner, which established the concept of "Crummy powers" in trust agreements. These powers enable contributions made to the trust to qualify for the annual gift tax exclusion. Within the Maryland Crummy Trust Agreement, the parents serve as the trustees, also known as the granters or creators, while the child is the beneficiary. The trust is designed to hold and manage assets, allowing the child to benefit from them at a specified age or at specific milestones predetermined by the trustees. One of the primary advantages of a Maryland Crummy Trust Agreement is the ability for trustees to utilize the annual gift tax exclusion. By providing the child with the right to withdraw or receive contributions made to the trust for a limited period, typically 30 days, those contributions qualify as "present interest" gifts and are eligible for the annual gift tax exclusion, shielding them from potential gift taxes. Maryland Crummy Trust Agreements can be structured in various ways to meet individual needs and circumstances. Some common variations of this trust include: 1. Standard Maryland Crummy Trust: This is a basic form of the agreement, where parents establish the trust and make regular contributions, providing the child with Crummy powers to withdraw the contributed funds, if desired. 2. Accumulation Maryland Crummy Trust: In this type of trust, the trustees have the option to accumulate income and maintain it within the trust until a later date, usually determined by the trustees. This allows for potential growth and wealth-building over time. 3. Limited Maryland Crummy Trust: Here, the trustees set limitations on the Crummy powers, only granting the child the right to withdraw a portion of the contributed funds rather than the full amount. These limitations can be useful in controlling access to funds and ensuring responsible financial management. 4. Charitable Maryland Crummy Trust: This trust variant includes provisions for making charitable contributions along with contributions for the benefit of the child. It allows trustees to support charitable causes while still benefiting their child and securing tax advantages. In conclusion, a Maryland Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees offers a flexible and tax-efficient estate planning solution. This legal instrument empowers parents to establish a trust to provide financial security for their child, while also utilizing the annual gift tax exclusion. Various types of Maryland Crummy Trust Agreements exist, enabling trustees to customize the trust according to their specific objectives and circumstances.

Maryland Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees: A Maryland Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a legal tool used for estate planning in Maryland. This type of trust allows parents to create a trust fund for the benefit of their child, providing financial security and control over assets while minimizing taxes and potential probate issues. The Crummy Trust is named after the court case Crummy v. Commissioner, which established the concept of "Crummy powers" in trust agreements. These powers enable contributions made to the trust to qualify for the annual gift tax exclusion. Within the Maryland Crummy Trust Agreement, the parents serve as the trustees, also known as the granters or creators, while the child is the beneficiary. The trust is designed to hold and manage assets, allowing the child to benefit from them at a specified age or at specific milestones predetermined by the trustees. One of the primary advantages of a Maryland Crummy Trust Agreement is the ability for trustees to utilize the annual gift tax exclusion. By providing the child with the right to withdraw or receive contributions made to the trust for a limited period, typically 30 days, those contributions qualify as "present interest" gifts and are eligible for the annual gift tax exclusion, shielding them from potential gift taxes. Maryland Crummy Trust Agreements can be structured in various ways to meet individual needs and circumstances. Some common variations of this trust include: 1. Standard Maryland Crummy Trust: This is a basic form of the agreement, where parents establish the trust and make regular contributions, providing the child with Crummy powers to withdraw the contributed funds, if desired. 2. Accumulation Maryland Crummy Trust: In this type of trust, the trustees have the option to accumulate income and maintain it within the trust until a later date, usually determined by the trustees. This allows for potential growth and wealth-building over time. 3. Limited Maryland Crummy Trust: Here, the trustees set limitations on the Crummy powers, only granting the child the right to withdraw a portion of the contributed funds rather than the full amount. These limitations can be useful in controlling access to funds and ensuring responsible financial management. 4. Charitable Maryland Crummy Trust: This trust variant includes provisions for making charitable contributions along with contributions for the benefit of the child. It allows trustees to support charitable causes while still benefiting their child and securing tax advantages. In conclusion, a Maryland Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees offers a flexible and tax-efficient estate planning solution. This legal instrument empowers parents to establish a trust to provide financial security for their child, while also utilizing the annual gift tax exclusion. Various types of Maryland Crummy Trust Agreements exist, enabling trustees to customize the trust according to their specific objectives and circumstances.