Crummey powers survive attack by IRS: a test case

Article Abstract:

The US Tax Court ruled for the taxpayer in Estate of Kohlsaat v. Commissioner on May 7, 1997, stopping another attempt by the IRS to eliminate Crummey trusts. Crummey trusts allow taxpayers to use the annual gift tax exclusion of $10,000 per person when transferring assets to a trust by giving the beneficiaries the right to withdraw that amount. The IRS charged that the trust failed a substance over form test when none of the 18 beneficiaries withdrew the amount. However, the Court disagreed that the failure to withdraw indicated an agreement.

Other Financial Vehicles, Trusts, not elsewhere classified, Trusts ex Ed, Religious, Charitable, Cases, Trusts (Law), Crummey trusts

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Grandparents and gifting: an alternative approach

Article Abstract:

Grandparents can give gifts to their grandchildren that meet the goals of minimizing taxes, not exceeding the annual exclusion and controlling distribution by recipient's age. These goals can be met by a combination of life insurance, family limited partnerships and 2503(c) trusts. The combination allows for a flexible, amendable distribution system and a controlled gifting environment.

Commercial Banks, Trust, Fiduciary, and Custody Activities, Estate & Tax Planning, Methods, Estate planning, Generation-skipping trusts

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