Question

A gift that might otherwise be viewed as a future interest in a trust can be treated as a present interest gift if:

Answer 1

Complete Question. A gift that might otherwise be viewed as a future interest in a trust can be treated as a present interest gift if:

1. The beneficiary has the right to contribute to the trust.
2. The beneficiary has the right to withdraw a contribution (gift) to the trust.
3. The beneficiary has the right to make income distributions to the trust.
4. The beneficiary has the right to make corpus contributions to the trust.

Answer:

2. The beneficiary has the right to withdraw a contribution (gift) to the trust.

Step-by-step explanation:

The Crummey power, to convert future interest gift to a present interest gift beneficiaries are allowed to withdraw contributions to a trust within a specific period of time usually 30 to 60 days.

The total withdrawal amount should be equal to the annual gift tax exclusion in a specific time period otherwise the asset will belong to the trust.