Final answer:
Of the provided options, the completed gift of $5,000 to the decedent's son is the transfer that is considered completed and out of the decedent's estate. Trusts retaining income or annuity for the grantor often result in the assets being included in the estate until the interest expires.
Step-by-step explanation:
Regarding the transfers that are completed during life and removed from the decedent's estate, the best example from the given options is c. $5,000 to the decedent's son, two months before death. This transfer is considered a completed gift and thus is out of the decedent's estate upon their death.
Both a grantor-retained income trust and a grantor-retained annuity trust involve the grantor retaining a certain interest in the trust, which means these assets are not completely removed from the decedent's estate for estate tax purposes until the retained interest has expired. A grantor trust established by the decedent can be structured in various ways, but in many cases, if the grantor retains control or benefits, the assets may still be included in their estate.
Upon death, if someone dies without a will and/or trust, termed intestate, the applicable state intestacy laws determine the distribution of their assets. Trusts are typically used to avoid the probate process and allow for the private transfer of assets according to the deceased's wishes. Once the trust's creator passes away, the instructions and assets within the trust generally become irrevocable.