Legal Question in Wills and Trusts in Washington

Re: Crumney powers

It is actually Crummey powers. Crummey was a party in a landmark case. Crummey powers are powers that permit a gift into the trust to be considered a present day gift for purposes of estate tax planning. If you are attempting to make a gift of property into a trust for purposes of reducing your estate for estate tax purposes the gift must be a present interest gift. However, if the gift isn't to be distributed until some future date to the trust beneficiaries there is a question as to whether the gift has actually been made on the date of transfer. The Crummey decision allows for gifts into trust to be considered present-day gifts (and thus not included in the grantor's estate for purposes of estate tax liability) if the gift transfer complies with certain rules. These rules are Crummey rules. So...a typical Crummey power would be that the trustee receives the gift and then must notify the trust beneficiary that he/she has 30 days in which to take the gift or the gift will be irrevocably placed into the trust. The 30 day period in which the beneficiary could have taken the gift is sufficient to consider the gift into the trust as a present day gift.

This is a rather complicated area of estate planning law. If you have further questions you probably should sit down with an attorney or accountant to discuss them in more detail.

I hope this helps.