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ESTATE AND GIFT TAX CONSIDERATIONSthe release of a general power over the property. This type of qualifying lapse issubjected to imposition of the estate tax.Life Insurance. The gross estate includes the value of life insurance receivableby the executor on the life of the decedent, and insurance receivable by otherbeneficiaries when the decedent retained any incidents of ownership at the timeof death, exercisable alone or in conjunction with another. 96 A reversionary interestof more than 5 percent of the value of the policy immediately before death isconsidered an incident of ownership.Other incidents of ownership include the power to change beneficiaries,revoke an assignment of the policy, pledge the policy for a loan, or cancel, surrender,or transfer the policy. 97The amount or value of the insurance policy includable in the owner’s estateis the face amount of the policy, as opposed to its cash surrender value.Transfers for Insufficient Consideration. The gross estate includes the followingproperty transferred for less than full and adequate consideration:• Certain transfers within three years of death• Retained life estate• Transfers taking effect at death• Revocable transfers• Powers of appointment(b) Taxable EstateThe taxable estate is defined in the federal estate tax law as the value of the grossestate less allowable deductions. 98The following items are deductions allowable from the gross estate to arriveat the taxable estate:• Funeral expenses• Administration expenses• Claims against the estate• Unpaid indebtedness included in the gross estate• Losses and other casualties• Charitable deduction• Marital deductionThe two most significant deductions are the charitable and marital estate taxdeductions.96 IRC § 2042.97 Reg. § 20.2042-1(c)(2).98 IRC § 2051. 238