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Question

Evelyn Johnson, a widow aged $85,$ has a diverse investment portfolio worth $$10$ million, primarily in publicly traded stocks. She is concerned about minimizing estate taxes, how some family members may spend an inheritance too quickly, and her own longevity. Evelyn decides to gift $$3$ million worth of her stock portfolio to an irrevocable trust for the benefit of her three adult children and two grandchildren.

How is Evelyn's $$3$ million gift to the family trust treated at death, based on her lifespan?

A$.$ If Evelyn lives to $86,$ the gift is not added to the adjusted gross estate to calculate the taxable estate.

B$.$ If Evelyn lives to $87,$ the gift is added to the taxable estate to calculate the tentative tax base.

C$.$ If Evelyn lives to $89,$ the gift is added to the adjusted gross estate to calculate the taxable estate.

D$.$ If Evelyn lives to $92,$ the gift is an adjustment to the gross estate to calculate the taxable estate.