Question

In each of the following situations explain whether the property or property interest, which is held as of the date of my death, will be included in my gross estate and, if so, what amount:

A: My principal residence that I own with my wife as community property. The residence is valued at $600,000.

B: In 2011 I transferred $400,000 to a trust and I retained the right to income for the rest of my life. At my death the trust assets were worth $500,000.

C: In 2011 my father transferred $400,000 to a trust and gave me income for the rest of my life. At my death the trust assets are worth $500,000.

Answer 1

A. As the property is jointly owned with wife, half of the value of property, i.e., $300,000 will be included in my gross estate.

B. $500,000 will be included in my gross estate, as the trust assets are used to provide income to me for my lifetime and I retain a control over the income, therefore, control on the assets too.

C. $500,000 will be included in my gross estate, as the trust assets are used to provide income to me for my lifetime and I retain a control over the income, therefore, control on the assets too.