In May 2019, Dudley and Eva enter into a property settlement preparatory to the dissolution of their marriage. Under the agreement, Dudley is to pay Eva $6 million in full satisfaction of her marital rights. Of this amount, Dudley pays $2.5 million immediately, and the balance is due one year later. The parties are divorced in July. Dudley dies in December, and his estate pays Eva the remaining $3.5 million in May 2020. Discuss the Federal estate and gift tax ramifications of these transactions to the parties involved.