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the decedent at the time of his death.” Sections 2034 through 2045
include in the gross estate several narrowly defined classes of
assets. Among these specific sections is section 2036, which reads
in pertinent part as follows:
SEC. 2036. TRANSFERS WITH RETAINED LIFE ESTATE.
(a) General Rule.--The value of the gross estate
shall include the value of all property to the extent of
any interest therein of which the decedent has at any
time made a transfer (except in case of a bona fide sale
for an adequate and full consideration in money or
money’s worth), by trust or otherwise, under which he has
retained for his life or for any period not ascertainable
without reference to his death or for any period which
does not in fact end before his death–-
(1) the possession or enjoyment of, or
the right to the income from, the property, or
(2) the right, either alone or in
conjunction with any person, to designate the
persons who shall possess or enjoy the
property or the income therefrom.
Section 2036(a) effectively includes in the gross estate the
full fair market value, at the date of death, of all property
transferred in which the decedent had retained an interest, rather
than the value of only the retained interest. Fidelity-
Philadelphia Trust Co. v. Rothensies, 324 U.S. 108 (1945). This
furthers the legislative policy to “include in a decedent’s gross
estate transfers that are essentially testamentary--i.e., transfers
which leave the transferor a significant interest in or control
over the property transferred during his lifetime.” United States
v. Estate of Grace, 395 U.S. 316, 320 (1969). Thus, an asset
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