Irrevocable Life Insurance Trust
(Single Individual) (Trusts for Children) (FL)

Summary

This template is a complete irrevocable trust for a Florida client that the client may use to transfer assets to family members or other beneficiaries, to be held in trust until a specified time, while allowing those transfers to qualify for the annual exclusion of lifetime gifts from federal gift tax. This template contains practical guidance, drafting notes, and alternate clauses. This template is drafted as a grantor trust for income tax purposes, meaning the client would be responsible for the income tax liability of the trust thereby conserving the assets transferred to the trust. In general, gifts of future interests in assets do not qualify for the annual exclusion. However, under the holding in Crummey v. Commissioner, 397 F.2d 82 (9th Cir. 1968), an otherwise disqualified future interest transfer may nevertheless be excluded from taxable transfers by the annual exclusion if the beneficiary of the trust has the power, even though only for a short period, to remove the transferred property from the trust. See I.R.C. § 2503(b). This template provides Crummey withdrawal rights for multiple beneficiaries. The Crummey withdrawal right will lapse if not exercised 60 days following notice to the beneficiary. A continuing trust is created for the beneficiaries until they reach age 35. For a full listing of key content related to estate plans for single people in Florida, see Estate Plan for Single Individual Resource Kit (FL). For additional information about irrevocable trusts, see Characteristics and Uses of Trusts (FL) and Requirements and Restrictions on Trust Purposes and Administration (FL). For further information about property transfers and tax considerations, see Transfer of Property Owned by Decedent, Lifetime Transfers and Estate Taxation, Life Insurance and Estate Taxation, and Real Property and Estate Taxation.