old people making will

Consider a recent case where a husband and wife created two revocable trusts for estate planning purposes, naming the husband as trustee of both. Upon the first spouse’s death (her), the assets of her revocable trust were to be divided into two marital trusts and a family trust.  The husband elected to treat the assets, $2.2 million, as qualified terminal interest property. However, he had never segregated the assets of his wife’s revocable trust into the three separate trusts.  Before his death 10 years later, he had withdrawn amounts from his wife’s trust for charitatble donations and personal use.  Because the fmaily trust never helt any of the trust assets from the wife’s trust, the Tax Court held that the entire value of her trust should be included in the husband’s estate.