What is a Crummey Notice?
In the 1960’s, the IRS attempted to apply and gift and estate tax to a trust that had been set up to receive gifts on behalf of its beneficiaries. The taxpayer who decided to fight this IRS decision became the court case that set the precedent for establishing a present interest capacity for gifts to trust. The case, Crummey v: Commissioner, was the first case to establish that if a beneficiary can withdraw some/all of a gift to trust, then the gift to trust will qualify as a present interest.
