@toyaa0 having read through all the posts/ responses by my very erudite friends/ colleagues, viz. @TomD8 , @Anonymous_ , @Opus 17 @and @Mike9241 , whereas I agree with all the comments but I read the whole situation a bit different and question the applicability of US tax laws till some conditions are fulfilled.
1. As i read the post , especially since right of use, right to revoke the gift ( under certain conditions ) and life-estate are retained by the donor --- this amounts to only a promise to gift rather than an actual gift/transfer of assets.
2. the donor , a non-US person, with assets in a foreign land, establishes these retained rights and promises under laws of Germany which cannot be contravened by US tax laws since the donor nor the assets are under US jurisdiction.
3. the right to use ( till death), to sell/ transfer, the right to revoke /Widerrufsrecht ( despite being conditional ) implies "transfer" with right to claim back -- all these to me imply a "promise " and not an actual transfer -- thus it is not a gift free and clear.
4. Therefore I am assuming it is a promise ( as in a will -- I give by son ..... ) that only comes into consumation on the death of and therefore extinction of the primacy rights of the donor. So for US purposes the estate comes into being at the death of the decedent and the promise becomes a reality. At this point US laws of inheritance applies to the beneficiary, not prior to that.
IMHO
