What does Crummey Power mean?

It is practically a procedure by which an individual may receive a gift which on which there is gift tax applied and he/she is allowed to swap this gift for one that tax deferred. There are certain conditions that must be met in order for Crummey Power to be in force, among others there must be a special mentioning that the gift belongs to the respective trust; another condition is that the gift’s value is not allowed to overstep $12,000 on a yearly basis per individual.

Crummey Power explained

Crummey Power got its name from Clifford Crummey who actually wanted to create a way to access tax exempt goods, so he founded a trust fund. In plain words, the structure by which Crummey power basically works is as follows:

• the trust itself is created in the advantage of a minor person, and the trust’s policy says it is possible to make certain donations/gifts which will be then tax deferred; more exactly unified gift and estate tax deferred


• The beneficiary of the gift may proceed to take out his/her funds but in order for Crummey Power to enter into force, he/she shall proceed only after a timeframe of 30 days. Usually after this period the gift enters under the policy of the trust which holds that gifts become tax deferred.


• If the beneficiary decides to withdraw funds in less than 30 days, he/she will have no access to the entire trust, but only the actual gift.