Please use these exhibits to answer the question below.

Hank is a single individual who possesses a life insurance policy worth $306,000 that will pay his two children a total of $830,000 upon his death. This year Hank transferred the policy and all incidents of ownership to an irrevocable trust that pays income annually to his two children for 15 years and then distributes the corpus to the children in equal shares.Reference the tax rate schedule in Exhibit 25-1 and the Unified Credit schedule in Exhibit 25-2 to answer this problem.

a.	Calculate the amount of gift tax due (if any) on the gift. Assume that Hank has made only one prior taxable gift of $5 million in 2011.

b.	Calculate the amount of cumulative taxable transfers for estate tax purposes if Hank dies this year but after the date of the gift. At the time of his death, Hanks probate estate is $8.2 million and it is to be divided in equal shares between his two children.

EXHIBIT 25-2 The Exemption Equivalent Year of Transfer Gift Tax Estate Tax 1986 1987-1997 1998 1999 2000-2001 2002-2003 2004-2005 2006-2008 2009-2010 2011 2012 2013 2014 $500,000 600,000 625,000 650,000 675,000 1,000,000 1,000,000 1,000,000 1,000,000 5,000,000 5,120,000 5,250,000 5,340,000 S 500,000 600,000 625,000 650,000 675,000 1,000,000 1,500,000 2,000,000 3,500,000 5,000,000 5,120,000 5,250,000 5,340,000