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Suppose the source text looked like this:

#include <stdlib.h>

union urecord_t
  char c;
  short s;
  long l;

struct record_t
  int type;
#define RTYPE_CHAR      0
#define RTYPE_SHORT     1
#define RTYPE_LONG      2
  urecord_t u;

bool is_negative(record_t *r)
  switch ( r->type )
    case RTYPE_CHAR:  return r->u.c < 0;
    case RTYPE_SHORT: return r->u.s < 0;
    case RTYPE_LONG:  return r->u.l < 0;

We have a disassembly like this:

Let’s improve it with unions. First, let’s define an union type. Since Unions are a special case of structures, we open a structure window (menu View|Structures), press Ins to create an union. Do not check “Create Union”

We create the union members using the regular data definition commands. (press D repeatedly to define a field, N to rename it) we obtain :

urecord_t union ;  (sizeof=0x4) chr
        db ? shrt
        dw ?
        lng dd ?
urecord_t ends;

record_t struc ; (sizeof=0x8)
        type dd ?
        u urecord_t ?
record_t ends

Switching to the disassembly window (or closing the enumeration window with Alt-F3), we apply the defined structure through the Edit|Operand types|Struct offset menu item and select the proper representation for the operand. In the union type case, it may be necessary to select the desired union member with the Edit|Structs|Select union member command. The final disassembly looks like this:

That’s all folks !