Since Crummey v. Commissioner was decided in 1968, the IRS has been making life difficult for the settlors of Crummey trusts. Only recently the parties again skirmished, this time over whether an in terrorem clause in the governing trust instrument per se renders withdrawal rights illusory. See Mikel v. Commissioner, T.C. Memo, 2015-64. It does not. Chalk up another victory for the taxpayer. While the Crummey trust continues to be an effective tax avoidance vehicle, the very feature that makes it effective potentially exposes the underlying property to the reach of the creditors of the holders of the withdrawal rights, namely the withdrawal rights themselves. In California and New York most notably the risk appears to be a serious one. Charles E. Rounds, Jr. discusses the Crummey trust generally, and these specific tax-avoidance and creditor-access issues in particular, in §9.18 of Loring and Rounds: A Trustee’s Handbook. The entire section, with some post-publication enhancements, is reproduced in its entirety below.