Section 2036.—Transfers With Retained Life Estate 26 CFR 20.2036–1: Transfers with retained life estate. (Also § 2038; 20.2038–1.) Substitution power. This ruling provides guidance regarding whether the corpus of an inter vivos trust is includible in the grantor’s gross estate under section 2036 or 2038 of the Code if the grantor retained the power, exercisable in a nonfiduciary capacity, to acquire property held in the trust by substituting other property of equivalent value. The ruling provides that, for estate tax purposes,
the substitution power will not, by itself, cause the value of the trust corpus to be includible...