The conflict between the annual gift tax exclusion and the five-and-five limitation is often solved by giving the beneficiary a hanging power of withdrawal. It permits the withdrawal powers with respect to the property in excess of the five-and-five limitations to hang, or to continue in effect from year to year.

Under this approach, the withdrawal power, up to the five-and-five limitation, lapses in any given year. This is done by adding a clause to the "Crummey provision" that converts the withdrawal power (at its expiration) to a special power of appointment. The beneficiary has a cumulative special power of appointment and the amounts subject to the power are the total amounts that could have been withdrawn annually but, in fact, were not withdrawn.

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