Annual Gift tax exclusion

I believe it is $0, as gifts to a trust are NOT gifts to a natural person. A gift tax return (709) would be required for any amount "gifted" to the trust; no annual exclusion would apply.

Unless the trusts are set up for this precise purpose, gifts to trusts are not eligible for the exemption. So the answer is likely to be $0. Stu

Sorry for the lack of clarity. I am referring to Irrevocable Life Insurance Trusts (ILITs) that have a "Crummey Provision" in them. The usual process is that the grantor makes a gift to the trust for the beneficiary. A crummey letter(s) is sent offering the beneficiaries the gift. The benes decline the offer and the gift is used to pay an insurance premium.

Ok, thanks for the clarification.

Depending on how the trust is drafted, for a Crummey trust with two beneficiaries the exempt amount could be $24,000, but it could also be $5,000 or $10,000. The reason is that the beneficiaries' failures to withdraw the gifts within the time provided are considered taxable gifts if they exceed either $5,000 or 5% of the assets out of which the money could have been taken. In general if the trust is drafted so that anything in the trust will belong to those particular beneficiaries in any event (e.g. will go to their estates if they die or they can designate who the money goes to under some circumstances), the gifts will be considered to be from the beneficiaries to themselves, which is not a taxable event. But if there are any restrictions - they can't designate who gets the property when they die or if they have a special power of appointment rather than a general one - they are not considered the ultimate beneficiaries, and the limit is $5,000 each, or perhaps for the two, depending on how the trust is drafted. Stu