(decedent, a surviving spouse, was beneficiary of several trusts, four of which were at issue; of those four, two were QTIP trusts, one was a marital deduction trust and one was a revocable trust; in 2001, QTIP trusts and marital deduction trust liquidated and assets (family partnership (FP) interests) transferred to existing revocable trust; decedent, at age 74 terminated trust and all assets (including FP interests) sold to children for 10-year deferred private annuity; under annuity, if decedent died within 10 years, significant cash was removed from decedent's estate; decedent received doctor's note that she was in reasonably good health at time annuity purchased, but doctor did not testify at trial and IRS viewed annuity as sham transaction (disguised gift for which decedent didn't receive adequate consideration) when decedent died slightly over 3 years later (but before any payments received); decedent and children used I.R.C. Sec. 7520 tables to value annuity properly, but IRS argued tables not appropriate for valuation because of decedent's health issues at time annuity purchased and lack of security for annuity (IRS bears burden of proof to use something other than tables to value annuity); court ruled for decedent (no disguised gift on transfer of FP interests for annuity) - doctor wrote that she had a greater than 50 percent chance of living for more than 18 months (thus, not terminally ill); IRS did not challenge doctor's letter, but relied on decedent's 24-hour home health care as argument that decedent would die within 10 years; court determined that home health care not dispositive of terminal illness or incurable disease, but that she was wealthy and could afford such care; annuity transaction not illusory; decedent did not retain indirect interest in FLP interests to cause inclusion in estate under I.R.C. Sec. 2036; but, decedent triggered gift tax under I.R.C. Sec. 2519 on value of QTIP trust assets (minus the value of decedent's qualifying income interest in QTIP trusts) because court determined that termination of QTIP trust was part of simultaneous transfer of assets in the QTIP trusts to decedent immediately followed by transfer of those assets to the decedent's children in a single transaction; NOTE: court's finding that decedent had disposed of her income interest in QTIP trust in private annuity sale thereby triggering gift tax under I.R.C. Sec. 2519 on value of remainder interest in QTIP incorrect; (1) court's ignoring of initial transfer to decedent resulted in sale by the trust of trust assets for annuity which is not an I.R.C. Sec. 2519 disposition (income interest merely continues in newly acquired asset; (2) I.R.C. Sec. 2519 inapplicable to principal distributions to surviving spouse from QTIP trust - under court's holding, decedent would have been hit with double taxation if it weren't for the annuity properly excluding the value of the assets from decedent's estate; (3) raises questions as to when a sale will be deemed to be sufficiently beyond distribution date to avoid I.R.C. Sec. 2519; (4) under facts of case, distributions of QTIP trust assets made to decedent's family members four years before QTIP trusts liquidated and were reported for gift tax purposes which should have triggered I.R.C. Sec. 2519 at that time and would have prevented it from applying in 2001).