Sandy purchased a life insurance policy on her own life and made her revocable living trust the owner and beneficiary of the policy. Sandy will continue to pay the premiums on the life insurance policy. Sandy has a moderate estate, but is not concerned about owing estate tax at her death. She is married and has two children, who are both named as beneficiaries under her revocable living trust. Which of the following statements correctly identify advantages or disadvantages of Sandy's life insurance transfer?

I. Sandy will not owe gift tax on the premium payments she will be making on the life insurance policy because they are not considered to be completed gifts.

II. At Sandy's death, the life insurance policy will avoid probate.

III. Sandy will owe gift tax for transferring the ownership of the life insurance policy to the revocable living trust.

IV. Sandy has made a completed gift of the life insurance policy by placing it in the revocable living trust.

A)

I, II, III, and IV

B)

I and II

C)

II and III

D)

I and IV