Which of the following conditions will enable the gift to qualify for the annual exclusion?

John plans to transfer his life insurance policy to an irrevocable trust for the benefit of his 19-yearold daughter, Jane.

Which of the following conditions will enable the gift to qualify for the annual exclusion?

l. Jane is the irrevocable beneficiary of the life insurance trust but cannot withdraw from the trust until the death benefits are paid.

ll. Jane is given “Crummey” demand powers permitting the withdrawal at her discretion of the annual additions to the trust.
A . l only
B . II only
C . Both l and ll
D . Neither I nor II

Answer: B