Crummey Trust
Definition of "Crummey trust"
Unfunded trust that acts as the owner of a life insurance policy. The trust receives a donor's cash payments on a periodic basis, from which the beneficiary of the trust has a specified period in which to make a cash withdrawal. If this is not done, the cash paid by the donor is used to pay the premiums due on the life insurance policy. Under this circumstance the IRS deems that a gift of present value interest by the donor has been made. It is important that a gift of present value interest be established because such a gift in trust will enable the donor to contribute up to $10,000 ($20,000 if two donors such as husband and wife contribute) in premium payments and enjoy the gift tax exclusion. When the donor dies, the life insurance policy in trust is effectively removed from the donor's estate.
Popular Insurance Terms
Requirement that the insured must have stayed in a hospital or other health care facility for at least a specified period of time before being entitled to receive insurance benefits. This ...
Plan that involves distribution of property by living hand and distribution of property after the death of its owner. Distribution by living hand can take the form of an outright gift, a ...
Insurance contract under which a policy owner cannot be assessed for adverse loss and expense experience of the insurance company. ...
Contractor who represents different insurance companies and who searches the market for the best place for a client's business. The independent agent, who owns the records of policies sold, ...
Combination of coverages from property and liability policies. ...
Same as term Cancellation Provision Clause: provision permitting an insured or an insurance company to cancel a property and casualty or a health insurance policy (circumstances vary; see ...
Annuity that provides income payments for a number of years provided the annuitant is alive to receive them. All income payments cease upon the death of the annuitant. ...
Act in which volunteers of nonprofit organizations and government entities do not incur liability if they are acting within the scope of their volunteer activities, their actions do not ...
same as term Lost Policy Receipt: life insurance company form to be signed by a policyholder who wishes to surrender a policy that has been lost. The signed receipt then becomes evidence ...
Have a question or comment?
We're here to help.