Trust And Estate Tax Planning Strategies Practice Test

A decedent owned a life insurance policy on their life with a $2,500,000 death benefit and had incidents of ownership at death. The executor is reviewing gross estate inclusion and possible planning alternatives for similar clients. Under IRC § 2042 and related regulations, which strategy would best minimize estate tax liability for a future client with similar objectives (assuming planning is done more than 3 years before death)?

An individual wants to transfer $8,000,000 of appreciating assets to descendants and is evaluating whether to make gifts now or at death. The individual expects the assets to double over the next 10 years. Under IRC §§ 2001, 2010, and 2501, which strategy would best minimize estate tax liability assuming the individual has sufficient lifetime exemption available and wants to remove future appreciation from the taxable estate?