Monday, January 20, 2020
Robert J. Adler recently published an Article entitled, Crummey Powers: Still a Powerful Estate Planning Tool, Probate & Property Magazine, Vol. 34 No. 1 (Jan/Feb 2020). Provided below is the introduction to the Article.
In the usual case, an unfunded irrevocable life insurance trust will rely on gifts from the trust grantor to provide funds necessary to pay future premiums. These gifts are subject to the gift tax. IRC § 2503(b) provides for a gift tax annual exclusion of up to $15,000 (as indexed through 2019) per donee per year for gifts of present interests. Gifts of a future interest do not qualify for the annual exclusion. Consequently, gratuitous transfers in trust of cash to pay life insurance premiums would ordinarily be future interest gifts for which no annually excludable amount is available.