Master Crummey Letters: Avoid Costly Tax Penalties
Understanding Crummey Trusts and the Critical Role of the Crummey Letter Crummey trusts are powerful tools for minimizing gift taxes by leveraging annual gift tax exclusions. They allow you to transfer assets to beneficiaries while avoiding immediate gift tax implications. However, many believe simply including withdrawal rights within the trust document is sufficient. This is a costly misconception. The crucial element is the Crummey letter—a separate, formal notification to beneficiaries, informing them of their right to withdraw funds within a short time frame (typically 30 days)....