The IRS has issued another private letter ruling granting retroactive tax effect to a judicial reformation of a trust which the IRS agreed did not carry out the intentions of the settlor due to an error by the attorney who … Continue reading
Tag Archives: Crummey powers
Judgment creditor of beneficiary of spendthrift trust could not attach trust assets and could not require distribution of beneficiary’s right to withdraw contributions to the trust because the right was not a “power of withdrawal” as defined by 20 Pa.C.S.A. … Continue reading
Gifts in trust normally do not qualify for the federal gift tax annual exclusion, but can qualify if beneficiaries are given limited rights to withdraw gifts from the trust. These withdrawal rights, usually known as “crummey powers,” are rarely exercised, and should be carefully drafted both to qualify for the annual exclusion and to avoid adverse gift tax consequences to the beneficiaries when the powers lapse without being exercised.
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