Contrast the Crummey Trust with the Sec. 2503(c)trust

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The Answer is Contributions to both discretionary trusts are eligible for the annual exclusion, despite the fact that both trusts limit the ability of the beneficiary to access the trust assets. The Sec. 2503(c)trust permits the minor beneficiary access to trust assets only at the trustee's discretion, while the Crummey trust permits a forfeitable right to withdraw trust assets.
The Sec. 2503(c)trust receives its legitimacy from the statutes while the Crummey trust receives its legitimacy through the judicial process. The trustee of a Sec. 2503(c)trust must distribute the assets and accumulated income to the beneficiary at age 21. Thus, the Crummey trust is more flexible than the Sec. 2503(c)trust because the beneficiary can be any age when the trust is created and the trust can be terminated at any age. However, under the Crummey trust, the beneficiary does have the right to demand distribution of the contribution to the trust for a period of time; thus, the donor's intent may be defeated if the beneficiary exercises the right of withdrawal.

Contrast the Crummey Trust with the Sec. 2503(c)trust

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Contrast the Crummey Trust with the Sec. 2503(c)trust

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