Which option is a form of trust for minors?

Which option is a form of trust for minors?

• A. Irrevocable trusts with Crummey provisions
• B. 2503(c) trusts for minors
• C. Simple trusts
• D. Complex trusts

Answer: (B)

A 2503(c) trust is a trust created specifically for a minor. It’s a “minor’s trust” under the Internal Revenue Code, designed to hold assets for a child’s benefit and usually to terminate or distribute the assets when the child reaches the age of majority (often 21). This structure keeps the gifts in a formal trust for the minor, with terms that govern distributions and eventual transfer of control to the child, which is why it’s considered a form of trust for minors. Irrevocable trusts with Crummey provisions are a tax-avoidance mechanism used inside trusts for various beneficiaries, not a type defined by being for minors. Simple and complex trusts are broad categories describing how income is handled and taxed, not specifically about minors.

A 2503(c) trust is a trust created specifically for a minor. It’s a “minor’s trust” under the Internal Revenue Code, designed to hold assets for a child’s benefit and usually to terminate or distribute the assets when the child reaches the age of majority (often 21). This structure keeps the gifts in a formal trust for the minor, with terms that govern distributions and eventual transfer of control to the child, which is why it’s considered a form of trust for minors.

Irrevocable trusts with Crummey provisions are a tax-avoidance mechanism used inside trusts for various beneficiaries, not a type defined by being for minors. Simple and complex trusts are broad categories describing how income is handled and taxed, not specifically about minors.