Section 2036

What happens to my trust assets under Section 2036 if I keep control of them?

Under Section 2036 of the Internal Revenue Code, assets you transfer to a trust but continue to control or benefit from can be pulled back into your taxable estate when you die. This is actually by design with a revocable living trust — because you retain the right to change or revoke it, those assets are included in your estate for tax purposes. For most families, this is not a problem since the federal estate tax exemption is $15,000,00026 USC 2001(c), 2010; P.L. 119-21 §70106Verified Jul 13, 2026View source per person. Where Section 2036 becomes a concern is with irrevocable trusts: if you transfer assets but quietly keep strings attached — like living in a home you gifted to a trust rent-free — the IRS can treat those assets as still yours.