(Download) "Considerations when Combining Crummey Powers with Total Discretionary Trusts" by Florida Bar Journal ~ eBook PDF Kindle ePub Free
eBook details
- Title: Considerations when Combining Crummey Powers with Total Discretionary Trusts
- Author : Florida Bar Journal
- Release Date : January 01, 2009
- Genre: Law,Books,Professional & Technical,
- Pages : * pages
- Size : 81 KB
Description
Total discretionary inter vivos trusts (1) provide a variety of benefits. For example, no one would deny the advantages that a sprinkle trust provides in taking care of the needs of multiple generations. Similarly, total discretionary trusts provide needed protection when an individual cannot hold onto money or has an addiction. The trustee in such a case could control what, if anything, is distributed. Adding a Crummey power to this type of trust produces certain consequences. The purpose of this article is to examine those consequences and how to deal with them. The inclusion of Crummey powers in a trust converts transfers which otherwise would be future interest transfers into transfers of present interests. Only present interests qualify for the gift tax annual exclusion under I.R.C. [section]2503(b). Should Crummey powers be included in total discretionary trusts? Assuming the settlor's primary purpose is to protect a beneficiary who cannot handle money or has an addiction, then giving a Crummey power to that beneficiary is clearly not the best approach. Likewise, if a beneficiary has a tax lien against him or her, the Florida Trust Code permits a creditor to reach what the power holder can withdraw. (2) However, even in these two instances, gift tax savings can still be achieved by giving Crummey powers to the remainder beneficiaries of the trust.