Phoenix Arizona Crummey Trust Agreement for Benefit of Child with Parents as Trustors

• Category: Trusts - Bypass
• State: Multi-State
• City: Phoenix
• 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 A Phoenix Arizona Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a legal arrangement that provides specific benefits to a child while allowing their parents to retain control over the assets. This type of trust is designed to leverage the annual gift tax exclusion provided by the Crummy rule. In a Phoenix Arizona Crummy Trust, the parents establish the trust and act as trustees, contributing assets such as cash, stocks, bonds, or real estate with the intention of benefiting their child. The trust is typically irrevocable, meaning that once the assets are transferred to the trust, the parents cannot reclaim them. By utilizing the Crummy rule, named after a court case, the trust can take advantage of the annual gift tax exclusion. This rule allows the trustees to make annual gifts to the trust up to a certain dollar amount without incurring gift taxes. In 2021, the annual exclusion is $15,000 per individual trust or, meaning that a married couple can contribute up to $30,000 per year without triggering gift taxes. The specific provisions of a Phoenix Arizona Crummy Trust Agreement for the Benefit of a Child may vary depending on the individual circumstances and goals of the trustees. However, some common elements can include: 1. Beneficiary's Interests: The trust agreement outlines the rights and benefits the child will receive from the trust. This can include provisions for education, healthcare, housing, or any other needs the trustees deem appropriate. 2. Trust Term: The agreement specifies the duration of the trust. It may be set up to terminate at a specific age or can extend beyond the child's adulthood, allowing for long-term financial planning. 3. Trustee Selection: The trustees appoint a trustee, usually a trusted individual or a professional entity, who will manage the trust and make distributions according to the terms outlined in the agreement. 4. Crummy Powers: The trust agreement includes "Crummy powers" that grant the child, or another designated individual, the right to withdraw the contributed assets within a specified timeframe, usually 30 days. This withdrawal right is important to meet the requirements of the annual gift tax exclusion. While there may not be distinct types of Phoenix Arizona Crummy Trust Agreements for the Benefit of a Child with Parents as Trustees, variations can arise based on factors such as the child's specific needs, the financial situation of the parents, and their estate planning objectives. It is advisable to consult with an experienced estate planning attorney in Phoenix, Arizona, to ensure the trust agreement aligns with the unique circumstances and objectives of the family.

A Phoenix Arizona Crummy Trust Agreement for the Benefit of a Child with Parents as Trustees is a legal arrangement that provides specific benefits to a child while allowing their parents to retain control over the assets. This type of trust is designed to leverage the annual gift tax exclusion provided by the Crummy rule. In a Phoenix Arizona Crummy Trust, the parents establish the trust and act as trustees, contributing assets such as cash, stocks, bonds, or real estate with the intention of benefiting their child. The trust is typically irrevocable, meaning that once the assets are transferred to the trust, the parents cannot reclaim them. By utilizing the Crummy rule, named after a court case, the trust can take advantage of the annual gift tax exclusion. This rule allows the trustees to make annual gifts to the trust up to a certain dollar amount without incurring gift taxes. In 2021, the annual exclusion is $15,000 per individual trust or, meaning that a married couple can contribute up to $30,000 per year without triggering gift taxes. The specific provisions of a Phoenix Arizona Crummy Trust Agreement for the Benefit of a Child may vary depending on the individual circumstances and goals of the trustees. However, some common elements can include: 1. Beneficiary's Interests: The trust agreement outlines the rights and benefits the child will receive from the trust. This can include provisions for education, healthcare, housing, or any other needs the trustees deem appropriate. 2. Trust Term: The agreement specifies the duration of the trust. It may be set up to terminate at a specific age or can extend beyond the child's adulthood, allowing for long-term financial planning. 3. Trustee Selection: The trustees appoint a trustee, usually a trusted individual or a professional entity, who will manage the trust and make distributions according to the terms outlined in the agreement. 4. Crummy Powers: The trust agreement includes "Crummy powers" that grant the child, or another designated individual, the right to withdraw the contributed assets within a specified timeframe, usually 30 days. This withdrawal right is important to meet the requirements of the annual gift tax exclusion. While there may not be distinct types of Phoenix Arizona Crummy Trust Agreements for the Benefit of a Child with Parents as Trustees, variations can arise based on factors such as the child's specific needs, the financial situation of the parents, and their estate planning objectives. It is advisable to consult with an experienced estate planning attorney in Phoenix, Arizona, to ensure the trust agreement aligns with the unique circumstances and objectives of the family.