Question

Jenny made the following transfers during her life:

• In 2013 she transferred $44,000 to an irrevocable trust for the benefit of her two children. Jenny retained the right to a 4% annuity payment from the trust for the years 2013 and 2014. At Jenny’s date of death, the trust had a value of $62,000.
• In 2015 she transferred her home to an irrevocable trust for the benefit of her two children. Jenny retained the right to live in the home for the remainder of her life. The fair market value of the home at the date of the transfer to the trust was $500,000. The fair market value of the home at Jenny’s date of death was $750,000.

Jenny died on July 13, 2018. With regard to the above transfers, how much is included in Jenny’s gross estate? Show calculations and explain.

Answer 1

When the transfer is made under an irrevocale trust then the subsequent party will become its benficiary or its Legal Owner ie Jenys children in this case.

Hence In above case there is nothing to be added to the estate of Jenny. The Trasfer of 44000 and 500000$ will be added to the estate of Trust and No taxabilty will arise in hand of jenny.