Publication Date

Summer 2022



Document Type



Estate plans often give trust beneficiaries powers of withdrawal for both tax and nontax reasons. For tax reasons, these powers of withdrawal are typically limited, such as a “five or five power” or a so-called Crummey power commonly pegged to the annual gift tax exclusion amount. A central issue with limited powers of with-drawal is the right of a beneficiary’s creditor to reach trust property subject to the beneficiary’s power to withdraw. Recent uniform statutes, such as the Uniform Trust Code and the Uniform Power of Appointment Act, as well as the Restatement (Third) of Trusts, provide guidance. This Article discusses the typical reasons for creating powers of withdrawal and the historical and recent treatment of the rights of creditors of trust beneficiaries with powers of withdrawal, along with some planning considerations.


©2022. Published in Real Property, Trusts & Estate Law Journal, Vol. 57, No. 2, Summer 2022, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

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