In July, $2002,$ Anthony sets up a trust for the benefit of William. At the same time, William sets up a trust for the benefit of Anthony of equal property value.

Under the provisions of Anthony$$s trust, the income is to be paid to William for William$$s life with the remainder distributed to William$$s children upon his death.

William$$s trust provides for income to Anthony for life; upon Anthony$$s death, the remainder is to be distributed to Anthony$$s children.

Both Anthony and William die in $2009.$

Tasks:

Based on the above scenario, answer the following questions:

$1.$ Analyze what the estate tax consequences to both Anthony and William are if they made a transfer with a retained life estate.

$2.$ Evaluate the internal revenue section that is at issue in the above scenario.

$3.$ Explain what the trust of equal property value is$.$

$4.$Analyze the circumstances when you can set up a trust of equal property value.