Crummey Trust Annual Exclusion Calculator 2026 β ILIT Funding
Calculate Crummey withdrawal-power gifts qualifying for the $19,000 annual exclusion per beneficiary. Multi-beneficiary tracker for ILITs with 5-and-5 lapse safe harbor analysis.
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Total amount you plan to contribute to the trust this year
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Total fair market value of trust assets before this contribution
Standard: 30 days
Crummey Exclusion Analysis
How Crummey Powers Work for Annual Exclusion Gifts
Without Crummey powers, gifts to irrevocable trusts are "future interest" gifts β not eligible for the $19,000 annual exclusion. With Crummey powers, each beneficiary receives a temporary withdrawal right, converting the gift to a "present interest."
Annual Exclusion = $19,000 per beneficiary per donor (2026)
Gift-Splitting: $38,000 per beneficiary if both spouses consent
Total Annual Exclusion = Exclusion per Benef Γ Num Beneficiaries Γ Num Donors
5-and-5 Safe Harbor = max($5,000, 5% Γ Trust Corpus) per beneficiary
Gift Using Lifetime Exemption = Total Gift β Total Annual Exclusion
Gift-Splitting: $38,000 per beneficiary if both spouses consent
Total Annual Exclusion = Exclusion per Benef Γ Num Beneficiaries Γ Num Donors
5-and-5 Safe Harbor = max($5,000, 5% Γ Trust Corpus) per beneficiary
Gift Using Lifetime Exemption = Total Gift β Total Annual Exclusion
Example: $76,000 gift, 4 beneficiaries, 1 donor
Total exclusion: 4 Γ $19,000 = $76,000
Lifetime exemption used: $0 β entirely covered by annual exclusions
100% covered by annual exclusions!
Total exclusion: 4 Γ $19,000 = $76,000
Lifetime exemption used: $0 β entirely covered by annual exclusions
100% covered by annual exclusions!
Extended
Multi-Beneficiary Crummey Planner
Add unlimited beneficiaries, apply 5-and-5 limit, generate Crummey letter template, multi-year tracking
Add each beneficiary individually. Applies the 5-and-5 lapse limit, generates a Crummey letter template, and projects multi-year cumulative tax-free transfers.
Beneficiary Inputs
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Beneficiary Summary Table
| Beneficiary | Relationship | Withdrawal Amount | 5-and-5 Limit | Annual Exclusion | Excess β Lifetime |
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Multi-Year Cumulative Tax-Free Transfers
Cumulative Annual Exclusion Gifts Lifetime Exemption Used
Crummey Letter Template
Frequently Asked Questions
What is a Crummey power and why does it matter?
A Crummey power is a beneficiary's temporary right to withdraw a gift made to an irrevocable trust. This withdrawal right transforms what would otherwise be a "future interest" gift (not eligible for the annual exclusion) into a "present interest" gift β qualifying for the $19,000 per-beneficiary annual gift tax exclusion in 2026. Without Crummey powers, gifts to trusts do not qualify for the annual exclusion because beneficiaries cannot access them.
What is the 5-and-5 lapse safe harbor?
After the Crummey withdrawal period expires, the beneficiary's power lapses. A lapsed power over more than the greater of $5,000 or 5% of the trust corpus is treated as a taxable gift by the beneficiary back to the trust. The "5-and-5" safe harbor limits this problem: if each beneficiary's annual withdrawal right does not exceed the greater of $5,000 or 5% of trust assets, the lapse is not a taxable gift by the beneficiary.
How long must the Crummey withdrawal period remain open?
The IRS requires a "reasonable time" β typically 30 days β during which the beneficiary must be able to exercise the withdrawal right. The trust must notify each beneficiary (a "Crummey letter") of their withdrawal right. The beneficiary's address must be current and the notice must be sent promptly after each gift is made. Failure to send proper Crummey notices can cause the IRS to deny the annual exclusion.
Can I use Crummey powers with an Irrevocable Life Insurance Trust (ILIT)?
Yes β ILITs are the most common use of Crummey powers. Annual premium payments to an ILIT are structured as Crummey gifts to each beneficiary (usually children). Each child receives a Crummey letter giving them 30 days to withdraw their share of the premium. Since they typically don't withdraw, the premium funds the trust which pays life insurance premiums. The death benefit passes estate-tax-free.
How many beneficiaries can I use to maximize Crummey gift exclusions?
Each beneficiary who holds a genuine withdrawal right gets their own $19,000 annual exclusion. A married couple with 3 children and 6 grandchildren could theoretically use 9 beneficiaries Γ $19,000 Γ 2 donors = $342,000 per year in annual exclusion gifts. However, the IRS scrutinizes "naked" Crummey powers held by beneficiaries with no real interest in the trust. The beneficiary must have some meaningful interest or the exclusion may be disallowed.