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Posted by sharx35 on November 6, 2006, 12:19 am
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> Back in 1991 (when estate taxes kicked in at $600,000 of
> assets), my father's lawyer set up, for him, a Irrevocable
> Life Insurance Trust. My brother and I are the trustees. My
> mother is the income beneficiary and brother and I receive
> the remainder once they both are gone. The lawyer died about
> 10 years ago and I've been doing all the record keeping
> myself and paying the premiums with dad's gifted money, etc.
> My question is this: How long do I need to keep the original
> "Crummey Letters". These are the notifications to the
> beneficiaries (my mother, brother and myself) that dad has
> made a gift to the trust and we have the right to withdraw
> it within 30 days. The beneficiares then sign that they (we)
> received the notice. Of course we have never demanded
> immediate payment of the gift, because we understand that
> it's being used to pay the life insurance premiums.
>
> So now it's 15 years later and I have a stack of this stuff.
> I'd like to scan it to .pdf files. My concern is that
> someday the IRS will deem the life insurance as part of
> dad's estate because I don't have original documents to show
> that we had the right to withdraw the gifts along the way.
> It would seem to me that the real issue here is not the life
> insurance but whether or not the gifts were of present
> value. And if that is the case there must be a limit on how
> many years back the IRS can deem a gift as "future value" or
> not. Regardless of the fact that the gift is being used to
> buy insurance.
>
> As a side note, the current estate tax free amount is $2M
> and rising to, I think $3.5M soon. Even if the life
> insurance WAS deemed "estate taxable" because I don't have
> 15 year old original "Crummey Letters", it still would not
> push dad over the $2M. Anything can happen with estate
> taxes, at this point, however, so I'd like to have some
> handle on the "Crummey Letters" before I scan 'n shred them.
>
> So do you guys think scanning to .pdf will create potential
> problems?
With THAT size of estate, don't be so cheap -- get
PROFESSIONAL advice.
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