Crummey Notice
Last updated 17 July 2026
A Crummey notice is a written notice telling a trust beneficiary that a contribution has been made and that the beneficiary has a temporary right to withdraw some or all of it. The name comes from a United States court case. The notice is commonly used with irrevocable life insurance trusts and other trusts funded through recurring gifts.
In the United States, an annual gift tax exclusion generally applies to gifts of a present interest, meaning the recipient can use the property now. Many trust contributions would otherwise be future interests. A genuine, time-limited withdrawal right can be designed to give the beneficiary a present interest, provided that the trust terms, notice, timing, and administration satisfy applicable requirements.
Why it matters for family offices
The notice is short, but its administration can affect the intended tax treatment. The trustee or office needs to identify the contribution, calculate the withdrawal right under the governing document, send notice promptly, allow the stated response period, and preserve evidence of delivery. The familiar period is often about 30 days, but the appropriate period and procedure depend on the trust and professional advice.
Beneficiaries rarely exercise these rights, yet the right must be real rather than a private understanding that withdrawals are forbidden. A withdrawal could also affect the trust's ability to use contributed cash for an insurance premium or investment. Families therefore need clear expectations and qualified US legal and tax guidance, especially where beneficiaries are minors or notices are sent through guardians.
How it shows up in practice
Suppose a parent transfers cash to an insurance trust so the trustee can pay an annual policy premium. The trust gives each named beneficiary a temporary withdrawal right. The trustee sends each beneficiary a notice stating the contribution, available amount, deadline, and method for exercising the right. After the period ends without a withdrawal, the trustee uses the cash to pay the premium as permitted by the trust.
The family office records the contribution date, copies of signed notices, delivery evidence, responses, and the later premium payment. It does not assume that repeating last year's form is enough if beneficiaries, trust terms, or contribution amounts have changed. That disciplined file gives advisers the evidence needed to assess whether the intended United States gift tax treatment was supported.
Related terms
Gift Tax
A US federal tax on transferring value to another person without receiving full value in return, designed to stop wealth passing tax-free during life. Gifts up to the annual exclusion, US$19,000 per recipient as of 2026, are tax-free, and larger gifts draw down the donor's lifetime exemption before any tax is owed. Systematic use of exclusions and exemptions is a cornerstone of US wealth transfer planning.
Gift Tax Return (Form 709)
The US federal return used to report gifts that exceed the annual exclusion or otherwise require disclosure, filed by the donor. The return tracks how much of the donor's lifetime exemption has been used and starts the statute of limitations if valuations are adequately disclosed. Accurate gift records across decades are essential for eventual estate tax calculations.
Insurance Trust (ILIT)
An irrevocable trust created to own a life insurance policy on the grantor, keeping the death benefit outside the grantor's taxable estate. Proceeds pass to beneficiaries free of estate tax and can provide liquidity to pay estate taxes or equalise inheritances without forced asset sales. ILITs are a standard building block in UHNW estate plans, particularly where wealth is concentrated in illiquid holdings.
Beneficiary
A person or entity entitled to receive benefits, such as income, capital, or discretionary distributions, from a trust, estate, insurance policy, or foundation. In family wealth structures, beneficiaries are usually family members across multiple generations. Understanding who benefits from which entity is essential for accurate consolidated reporting of family wealth.
Irrevocable Trust
A trust that cannot be unwound by the grantor once assets are transferred in, permanently removing those assets from the grantor's ownership. That permanence is what delivers the benefits: estate tax reduction, creditor protection, and multi-generational control. Most sophisticated wealth transfer structures, from dynasty trusts to GRATs and insurance trusts, are irrevocable.
See how family offices put this into practice
Asora gives family offices one clear view of their entire wealth.
Schedule a demo