Tai was the sole income beneficiary for life of each of the trusts described below. For each trust, indicate whether and why it was includible in Tai’s gross estate.
a. A trust created under the will of Tai’s mother, who died in 1996. Upon Tai’s death, the trust assets are to pass to those of Tai’s descendants whom Tai directs by his will. Should Tai fail to appoint the trust property, the trust assets are to be distributed to the Smithsonian Institution. Tai willed the property to his twin daughters in equal shares.
b. An irrevocable inter vivos trust created in 2001 by Tai’s father. The trust agreement authorizes Tai to appoint the property to whomever he so desires. The appointment could be made only by his will. In his will, Tai appointed the property to an elderly neighbor.
c. An irrevocable trust created by Tai’s uncle in 2005. The trust instrument authorized Tai to demand that the trustee distribute trust assets to Tai for his health and/or maintenance needs. Any property remaining in the trust at Tai’s death will pass in accordance with the trust instrument to Tai’s descendants in equal shares.
d. A trust created under the will of Tai’s great-grandmother, who died in 1941. Her will authorizes Tai to appoint the property by his will to whomever he so desires. In default of appointment, the property is to pass to Tai’s descendants in equal shares. Tai’s will did not mention this trust.
e. Assume the same facts as in Part b except Tai’s will did not mention the trust property.