Crummey withdrawals require written notice to beneficiaries to withdraw. Which option is true?

• A. They require no notice
• B. They require written notice to beneficiaries to withdraw
• C. They require court approval
• D. They are not allowed to withdraw

Answer: (B)

Crummey withdrawals hinge on giving the beneficiary a present, exercisable withdrawal right. For the gift to qualify for the annual gift tax exclusion, the beneficiary must have a current right to withdraw a portion of the gifted amount for a limited time. The written notice to beneficiaries is the way this right is communicated, ensuring the withdrawal right is known and enforceable, and it sets the window during which the withdrawal can be made. Without that written notice, the withdrawal right may not count as a present interest, which can affect the gift tax treatment.

So, the statement that written notice to beneficiaries is required to withdraw is the correct one. The other options don’t fit because no notice is not enough to establish a present interest, court approval isn’t required to enable the withdrawal, and beneficiaries are indeed allowed to withdraw if they have the right and notice.