On May 13, 6:43 pm, joetaxpayer <joetaxpa...@[EMAIL PROTECTED]
> wrote:
> It depends. You can arrange for a trust, this can be costly to set up
> $2000-$3000 depending on the lawyer, and maybe a cost for the trustee.
> You are then passing along the investment decisions to the trustee, and
> not the child, although if the trustee is close to the family, they'll
> work closely with you. If it's a truly disinterested third party, they
> will follow 'prudent man' standards of investing which you may or may
> not agree with. The child still needs to have access to the gift each
> year, but can let it stay in the trust. If they are a minor, it's smoke
> and mirrors, you sign the letter saying the money stays in the trust. It
> they are an adult, they actually sign the right to the immediate money.
> This is called a "Crummy Letter". If they want your continued gifts and
> your ongoing love, they will sign.
Ah yes, I do love a good Crummey Provision.
But I wanted to point out to the group that in early April '08 the
Senate Finance Committee concluded a series of three meetings
regarding estate tax reform. One reform specifically mentioned, and
being considered, was the elimination or drastic reduction of Crummey
withdrawal powers and their qualification for the annual gift
exclusion. That would be a heavy blow to numerous estate trusts.
I can only speculate what will eventually precipitate, but I sure
would hate to lose this valuable estate planning tool. Stay tuned for
updates...
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