Revocable Transfers - I.R.C. §2038

The gross estate includes the value of any interest in property transferred by decedent during lifetime, if the enjoyment of the interest was subject to any change through the exercise of a power by the donor to alter, amend, revoke or terminate, which power was in effect as of the date of the donor's death or had been relinquished by him within three years prior to his death.

The underlying rationale for inclusion of the transferred property in the gross estate is based upon the fact that the decedent actually retained control over the ultimate beneficial enjoyment of the property transferred. A transfer of property which is subject to revocation and reclaiming by the transferor is not considered a completed transfer. Note that the transferor need not actually exercise his power to alter, amend, revoke or terminate; he need only possess any such power in order for the property to be includable in his gross estate.

A prominent example of this type of transfer is the revocable inter-vivos trust (popularly referred to as "living trust"). Such trusts are often used for the transfer of title of property in order to remove such property from eventual probate proceedings. However, a "living trust" will not remove the trust property from the gross estate for federal estate tax purposes as long as the grantor retains the right to revoke it.


In addition to the property owned outright at the date of death the gross estate for federal estate tax purposes includes certain other property with which the decedent was connected, as discussed in the following blog posts:

Property Transferred With Retained Life Estate - I.R.C. §2036

Transfers Taking Effect at Death - I.R.C. §2037

Revocable Transfers - I.R.C. §2038

Annuities - I.R.C. §2039

Jointly Owned Property - I.R.C. §2040

Property Subject to General Power of Appointment - I.R.C. §2041

Proceeds of Life Insurance - I.R.C. §2042

Gifts Made Within Three Years of Death - I.R.C. §2035

Recent Posts

See All

Estate Planning and Divorce

It has been this authors experience that the engagement agreements of many divorce attorneys specifically disclaim the divorce attorney’s responsibility for any tax or estate planning issues involved

Common Legal Terms Relating To Wills And Intestacy

ABATEMENT Cutting back certain gifts under a will when it's necessary to meet expenses, pay taxes, satisfy debts or take care of other bequests that are given priority under law or under the will. ADE


Wills, Trusts & Estates 

30 years of

1180 6th Avenue

8th Floor

New York, New York 10036

Call For Consultation:

212-843-4059 or 646-946-8327




Adler & Adler celebrating 30 years of succesful law practice
Top attorney Robert Adler gets highest rating from Avvo.

Serving New York State: New York City including Manhattan (New York County); Brooklyn (Kings County); Bronx; Queens; Staten Island (Richmond County); Long Island (Nassau County and Suffolk County); Westchester County, Rockland County, Erie County, Schenectady County,

Monroe County, Onandaga County, Orange County, Albany County, Dutchess County, Broome County, Sullivan County, and Ulster County.

​​​​ © 2019 Adler & Adler, PLLC - Attorney Advertising.  The content on this site does not constitute legal advice. There is no attorney-client relationship created through the presentation of this website or your sending us any information about your activities or needs. The commencement of an attorney-client relationship requires  our mutual written agreement on terms of engagement.