Definition - What does Crummey Trust mean?
A Crummey trust is a type of trust in which entrusted assets can be given to beneficiaries up to a certain amount per year as "gifts." By ensuring that these gifts remain below a certain threshold, the recipient can avoid paying the gift tax.
Insuranceopedia explains Crummey Trust
Many people use Crummey trusts as estate planning tools to help them minimize their tax burdens while maximizing the amount of assets they can pass on to beneficiaries.
Crummey trusts are often set up by parents with their children as the beneficiaries. Parents frequently do this until their children hit a specific age, at which point they gain access to the full scale of assets in the trust.
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