medium · Certified Financial Planner Estate Planning
Chloe Ainsley is 12 years old. Her parents fund an ILIT with 19,000 and provide Crummey notice to her legal guardian. Chloe's guardian chooses not to withdraw the funds.
Does this lapse consume any of Chloe's15,000,000 lifetime exclusion?
- Yes, to the extent the lapse exceeds $5,000 (assuming a small trust corpus).
- No, because minors cannot make taxable gifts.
- No, because Crummey powers are void if given to a minor.
- Yes, the full $19,000 is a taxable gift because Chloe didn't personally receive notice.
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