US FederalCan I gift money to my children during my lifetime to reduce my estate tax?
Yes, you can gift money to your children during your lifetime to reduce your estate tax, but gifts above the annual exclusion amount count against your lifetime unified credit — which in 2024 is $13.61 million per person.
What the Law Says
Federal law allows individuals to transfer wealth during life or at death using a unified credit that applies to both gift and estate taxes. This means lifetime gifts reduce the amount available to shield your estate from tax later.
The Internal Revenue Code provides a 'unified credit' that offsets both gift tax (on lifetime transfers) and estate tax (on transfers at death). The credit is tied to an exemption amount — meaning you can give away or leave up to a certain total value free of federal transfer tax.
Each year, you may give up to a set amount — $18,000 per recipient in 2024 — without using any of your lifetime exemption. Gifts above that amount must be reported on IRS Form 709 and reduce your remaining unified credit.
The lifetime exemption amount is adjusted annually for inflation. For decedents dying in 2024, the exemption is $13.61 million per individual. Married couples can effectively double this amount using portability and lifetime planning.
Statutory TextEvery individual shall be allowed a credit against the tax imposed by section 2001 equal to the sum of the credits allowable under subsection (b) and subsection (c).
— 26 U.S.C. § 2010 — Unified credit against estate tax
Statutory TextThe amount of the credit allowable under subsection (a) shall be the amount equivalent to the basic exclusion amount.
— 26 U.S.C. § 2010(c)(1) — Basic exclusion amount
What to Do
Review your total planned lifetime gifts and estimate how much of your $13.61M exemption they’ll use.
Make annual gifts of up to $18,000 per child (or more with spouse’s consent via gift-splitting) to avoid reporting.
File IRS Form 709 for any taxable gifts — even if no tax is due — to track exemption usage.
Consult a tax professional before large gifts, especially involving trusts, real estate, or business interests.
Update your estate plan regularly — the current high exemption expires after 2025 unless extended by Congress.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.