Problem
1) Marcy transferred $40,000 into a trust two years ago. She named her bank as trustee, her husband Marshall as the income beneficiary, and their children Russ and Audrey as the remainder beneficiaries. A trust provision also gave Marshall a right to appoint property to himself for his support in his accustomed manner of living. The bank purchased a $1 million life insurance policy on Marcy's life soon after the money was transferred into the trust. When Marcy died this year, the value of the policy was $200,000. How much of the trust assets will be included in Marcy's gross estate?
2) Using the same facts in Question 3, how much of the trust will be included in Marshall's gross estate if the trust grows to $1.2 million in the year he dies?