A Crummey power is the specific mechanism that turns an otherwise-taxable “future interest” trust gift into a “present interest” gift eligible for the annual exclusion.
How it works
Each trust beneficiary with a genuine, time-limited withdrawal right shelters their own share of the annual exclusion. Multiplying beneficiaries by the exclusion gives the total shelterable amount — anything a premium contribution exceeds that by requires lifetime exemption or is a taxable gift.
What this does not include
This assumes each beneficiary’s Crummey right is properly administered — a genuine, time-limited withdrawal notice actually sent and the right genuinely available, not just documented — a compliance detail this calculator’s dollar math doesn’t verify.
How to use this calculator
- Enter the annual premium contribution and the number of beneficiaries with Crummey rights.
- Enter the current annual gift tax exclusion.
Frequently asked questions
How long does a Crummey withdrawal right typically last?
Commonly 30 days, after which it lapses — the beneficiary must have a genuine opportunity to withdraw, even though in practice they’re expected not to.
Does adding more beneficiaries always help?
Only if the added beneficiaries have real Crummey rights the IRS would respect — adding trust beneficiaries purely to inflate the shelterable amount, without a genuine withdrawal right, risks IRS challenge.
What happens to the excess above the shelterable amount?
It’s a taxable gift, using lifetime gift tax exemption (or generating actual gift tax if exemption is exhausted) unless the grantor pays gift tax directly.
