Hugh created an irrevocable trust five years ago and transferred a $4 million whole-life policy to the trust. His wife, Meryl, will receive the income for life, with the remainder payable to her estate. What is the consequence of this transfer? 

a. Hugh and Meryl can offset the taxable amount of the premiums with gift-splitting and annual exclusions.

b. Assuming Meryl survives Hugh, only the trust’s remainder interest is includable in her estate.

c. When Hugh transferred the policy to the trust, he could not offset the gift tax with a marital deduction.

d. Hugh can borrow from the policy’s cash value without adverse tax consequences.