Ron and Bob are brothers. Ron contributes $400,000 to a trust containing the following language: The trustee shall distribute as much of the trust income or principal to Bob's children in such amounts and at such intervals as the trustee, in its sole discretion, determines necessary or appropriate. Upon Bob's death, the trust assets shall be distributed to Bob's then-living descendants per stirpes. Ron designates Bob to serve as trustee. At the same time, Bob transfers $500,000 to an irrevocable trust for the benefit of Ron's children containing the same terms and designates Ron to serve as trustee.

a. When Ron dies, the assets of the trust that Bob funded (of which Ron serves as trustee) are valued at $800,000. Discuss the estate tax consequences of the arrangement to Ron.

b. Assume now that the provision in the trust established by Ron reads as follows: The trustee shall distribute as much of the trust income or principal to Bob's children in such amounts and at such intervals as the trustee, in its sole discretion, determines necessary or appropriate for the recipient's health, education, support in his or her accustomed manner of living, or maintenance. Upon Bob's death, the trust assets shall be distributed to Bob's then-living descendants per stirpes. The trust established by Bob contains the same provisions. How does this change affect your answers to (a), if at all?