Crummey Letter Notice Template

What Is the Crummey Letter Notice?

This notice letter is the essential document that trustees must send to beneficiaries every time someone contributes to a Crummey trust or irrevocable life insurance trust. The letter transforms contributions from future interest gifts that don't qualify for annual exclusions into present interest gifts that do qualify, potentially saving contributors hundreds of thousands in gift taxes over time. Without proper notice, the IRS can disallow annual exclusions and require the contributor to consume their lifetime exemption or pay immediate gift tax.

The notice serves multiple legal purposes simultaneously. It documents that beneficiaries received actual notice of their withdrawal rights within a reasonable time after the contribution. It specifies the exact amount each beneficiary can withdraw and the deadline for exercising rights. It creates proof of delivery that trustees can present during IRS audits of the contributor's estate. Most importantly, it demonstrates that withdrawal rights were genuine legal entitlements, not paper formalities created solely for tax purposes.

 

 

Is This Crummey Letter Notice Right for You?

You need this notice if you're:

• Serving as trustee for a Crummey trust or irrevocable life insurance trust
• Required to send annual notices to beneficiaries about withdrawal rights
• Making contributions to a trust that uses Crummey powers for gift tax exclusions
• Documenting beneficiary notification for IRS compliance and audit protection
• Managing life insurance premium payments through annual trust contributions
• Administering trusts where contributors need to preserve annual exclusions

You definitely need this notice if:

• You received a trust contribution and must notify beneficiaries within 15 days
• The contributor is relying on annual exclusions to avoid filing gift tax returns
• You need provable documentation that beneficiaries had genuine withdrawal opportunities
• Multiple beneficiaries require individual withdrawal calculations under 5 and 5 rules
• You're preparing for potential IRS scrutiny of the contributor's estate tax planning

 

Why Thousands Trust Legal GPS Templates

Save Money: Estate planning attorneys charge $200-400 per Crummey notice or $2,000+ annually for full trust administration including notices.

Save Time: Download immediately and customize each notice in under 15 minutes with built-in withdrawal calculations.

Look Professional: Attorney-drafted language meets IRS notice requirements and demonstrates serious compliance with Crummey power obligations.

Keeps You Out of Court: Comprehensive withdrawal amount calculations with 5 and 5 power protections prevent deemed gifts from beneficiaries when rights lapse, while detailed proof of delivery sections create the audit trail trustees need to defend annual exclusions during IRS estate tax examinations decades after contributions.

 

 

 

Get Protected in 3 Simple Steps

Step 1: Secure Checkout

Complete your purchase through our encrypted payment system. You'll receive instant access to your template.

Step 2: Instant Download

Download your Crummey letter notice immediately as a fully editable document.

Step 3: Fill In the Highlighted Fields

Open the template each time you receive a trust contribution and customize with beneficiary information, contribution details, and calculated withdrawal amounts. Our comprehensive guide explains the 5 and 5 power calculations, proper delivery methods for audit protection, and timing requirements for sending notices.

 

Frequently Asked Questions

Can I use this template multiple times?

Yes. Once you purchase the template, you can use it every time someone makes a contribution to your Crummey trust. Most trustees send multiple notices each year as they receive annual contributions for premium payments or wealth transfer purposes.

Is this contract legally binding?

Yes. This notice creates legally enforceable withdrawal rights for beneficiaries. Once you send it, beneficiaries have the absolute right to withdraw the amounts stated during the specified withdrawal period. The notice also creates the documentation that allows contributors to claim annual gift tax exclusions.

How quickly do I need to send this notice after receiving a contribution?

Send within 15 days of receiving the contribution. The IRS has not specified an exact deadline, but courts have questioned whether notices sent months after contributions provided beneficiaries with meaningful withdrawal opportunities. Prompt notice strengthens your position if the IRS later audits the contributor's estate.

What happens if a beneficiary actually exercises their withdrawal right?

You must honor the withdrawal demand if it's submitted properly and timely. Distribute the requested amount within the timeframe specified in your trust document and this notice, typically 10 business days. This is why trustees must maintain sufficient liquid assets to cover all outstanding withdrawal rights until they lapse.

Do I need to send notices by certified mail?

Certified mail with return receipt is the safest method because it provides proof that beneficiaries received the notice. However, first-class mail or email are acceptable if your trust document permits them. Whatever method you choose, document it carefully in your trustee records as this becomes your IRS audit protection decades later.

What if a beneficiary is a minor—who do I send the notice to?

Send to the minor's parent, legal guardian, or conservator. Most estate planners recommend sending the notice addressed to the minor at the parent's address, creating documentation that the minor received notice even though a parent will likely review it. If the minor is old enough to exercise rights directly under your trust terms, still copy the parent for practical purposes.