E. Hans Lundsten, Joseph Marion, III, David Riedel and Christina Scola write that the Crummey Trust is still valuable today, even with higher estate tax exemptions. They note that traditionally, trusts used in estate planning contain “Crummey” withdrawal powers to ensure that contributions qualify for the annual gift tax exclusion. Today, the exclusion allows you to give up to $14,000 per year ($28,000 for married couples) to any number of recipients.
They also note that now that the gift and estate tax exemption has reached an inflation-adjusted $5.34 million, fewer people have to worry about gift and estate taxes. But, for many, the annual exclusion continues to be an important estate planning strategy. Thus, Crummey powers continue to be relevant.