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?
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