Use a Crummey trust to preserve gift tax exclusion

Description

Abstract: The annual exclusion — which allows one to make tax-free gifts of up to $14,000 per year to an unlimited number of people — remains an important estate planning tool. Affluent people whose estates exceed the $5.45 million estate tax exemption amount continue to seek strategies, such as the annual exclusion, for minimizing gift and estate taxes. And even those with more modest estates may want to take advantage of the annual exclusion to shelter their assets against potential future changes in their wealth and federal estate tax laws. For these folks, a Crummey trust is an option. This article examines the ins and outs of using a Crummey trust.