An unfunded trust which acts as the owner of a life insurance policy. The donor's periodic payments are made to the trust from which the trust's beneficiary can make a cash withdrawal. If no withdrawal is made, the donor's payment is applied to the premiums due on the life insurance policy.
a trust which is funded with annual exclusion gifts.
an Irrevocable Life Insurance Trust that allows the beneficiaries to demand that the trustee pay them their share of the monies contributed to the trust within a specified period of time
a trust set up for a minor, often to hold funds intended for the child's future higher education costs
a trust that gives the beneficiary a right of withdrawal over contributions to the trust (a "Crummey power") that qualifies gifts to the trust for the gift tax annual exclusion
An irrevocable life insurance trust that has "Crummey Powers" incorporated into the document. The "Crummey Power" allows you to make a gift of up to $10,000 per donee, per year, (although usually less than this amount) into the trust. The current income beneficiary(s) has the right to withdraw the gifted amount during a specified period of time. If the withdrawal does not take place, the gift amount defaults to the trust, and remains in the trust to pay insurance premiums. By using this type of trust, the proceeds of the insurance policy, when paid to the trustee upon death, do not become a taxable part of the estate of the decedent.
A trust that provides a Crummey power to the beneficiary giving him or her a right to withdraw funds for a limited period of time. A Crummey notice must be given to the beneficiary notifying him or her of the funds and the right to withdraw them. This provision is a necessary component for some irrevocable trusts (including life insurance trusts) to qualify gifts for an annual exclusion amount exempt from estate taxes.
An irrevocable trust established to qualify contributions for the annual federal gift tax exclusion (currently $11,000) for gifts of a present interest. So-called because the trust contains "Crummey Powers," enabling a beneficiary to withdraw assets contributed to the trust for a limited period of time.
This is a form of an irrevocable trust, discussed below.