Some individuals wish to provide outright gifts to their heirs, commonly to be used to purchase a home (but could be for other uses). This can be achieved through the use of their annual gift exclusion, which is currently $14,000 per donee (in other words, you can give $14,000 to as many people as you wish). Assuming that this amount will not be adequate for a specific purpose (such as helping a child purchase a home), a portion of the lifetime gift tax credit may be used, however, this is not the best use of this credit. Ideally, an individual should use their gift tax credit to transfer a highly appreciated asset. This ensures that any future appreciation on the asset will avoid estate tax.

Also remember that an individual can pay for qualified tuition costs and for medical expenses of other individuals, without limitation. This can be an excellent tool if you want to pay for a child or grandchild