It’s the holiday season — a time when many families give gifts, share memories and think about what matters most. But did you know that gifting can also be a powerful estate-planning strategy? With a few thoughtful moves before the year ends, you can help your loved ones, reduce the size of your taxable estate, and avoid stress and expense later.
As estate and elder law attorneys with nearly 30 years of experience, we’ve seen how the right planning now can make life easier for your family and help you keep more of what you’ve worked hard to build.
How Much Can You Gift in 2025?
Under federal law, you can give up to $19,000 per person in 2025 without triggering gift tax reporting.
Here’s what that means in real terms:
- You can give $19,000 to your child.
- Your spouse, if you’re married, can also give $19,000 to that same child — for a total of $38,000 per child.
- You can do this for as many family members or friends as you want.
That’s a simple and tax-free way to transfer wealth now instead of later.
Gifts Aren’t Taxable to the Recipient
Here’s another important point: the person you give to does not pay tax on the gift. Whether you give cash, stock, or other property (within these limits), the recipient doesn’t owe income tax on it.
This makes gifting a great tool to help children or grandchildren now — especially if you’re thinking about education, a down payment on a home, or a financial boost for a business.
What About Gifts Larger Than $19,000?
If you give more than $19,000 to one person in 2025, you don’t automatically owe tax. But:
- You must file IRS Form 709 (a gift tax return).
- The amount over $19,000 reduces your lifetime federal gift and estate tax exemption.
For 2025, the lifetime exemption is $13.99 million per person — a very large number by most standards.
This exemption covers both gifts you make during your life and assets you transfer at death. Most people will never hit this limit, but filing Form 709 when needed is essential to track how much of your exemption you’ve already used.
Special Exceptions: Tuition and Medical Gifts
There’s a sweet spot in the tax law that many people miss:
You can pay unlimited tuition or medical bills for someone without it counting toward the $19,000 limit — as long as you pay the school or medical provider directly.
That means you could:
- Pay your grandchild’s college tuition directly to the school.
- Pay a medical bill directly to the provider.
…without using any of your gift tax exclusion or your lifetime exemption.
This strategy is especially powerful during the holidays when families often plan for education expenses.
Minnesota Clients: Important Lookback Rules
For our Minnesota clients, there’s an extra twist:
- Minnesota does not have a state gift tax.
- But Minnesota has a 3-year “lookback” rule. That means taxable gifts made within three years of your death can be added back into your estate for state estate tax purposes.
So if you plan on gifting more than $19,000 per person late in life and you pass away soon after, Minnesota may treat those gifts as if they were part of your estate again — potentially increasing your estate tax.
For clients considering long-term care or Medicaid planning, federal Medicaid (Medical Assistance) also has a 60-month lookback period. Gifts made within five years of applying for assistance may affect eligibility. We can help you navigate those rules in detail.
Practical Examples
Let’s make this concrete.
Example 1: Holiday Gifting Without Reporting
You and your spouse each give $19,000 to each of your three children by December 31. That’s $38,000 per child — no gift tax return needed, and your children pay no tax.
Example 2: Helping With College
You pay $12,000 directly to your granddaughter’s university for her fall semester tuition. That direct tuition payment doesn’t count toward the annual $19,000 exclusion at all.
Example 3: Gifting More Than the Annual Exclusion
You give your son $100,000. The first $19,000 is excluded. The remaining $81,000 reduces your lifetime exemption, and you file Form 709.
Don’t Forget: Help Your Kids Plan Too
One of the most meaningful moves we see is parents paying for their adult children’s estate plans.A simple will or trust, health care directive, and power of attorney gives your children the power to name guardians, trustees, and decision-makers — so their own families are protected too.
Think about it: you’ve planned your legacy — why not help your children do the same?
Start Now — Not After the New Year
Because the $19,000 limit applies per calendar year, and because the current federal exemption is very high but scheduled to change over the coming years, acting before December 31 matters.
With thoughtful year-end gifting:
- You can shrink your taxable estate.
- You can help loved ones now.
- You can avoid unnecessary tax paperwork or confusion.
- You can be confident your legacy is protected.
Need Help Planning or Filing?
Estate and gift tax laws are powerful, but they can be confusing. If you’re in Minnesota or Florida and want help with year-end gifting, estate planning, or understanding how this affects your long-term care planning, we’re here to guide you. Call us or schedule a consultation today at 941-909-4644 for our Florida Office or at 763-420-5087 for our Minnetonka, Minnesota office. Or you can fill out the contact form on this page and a member of our team will reach out to you to schedule your meeting.
To discover more, read our complete guide to gifting by clicking here.
In the meantime, if you would like to discover more, join us in my upcoming masterclass where I'll reveal strategies to help you avoid probate, save on taxes, protect the money you leave for your kids in the event they get divorced and much more. Click here to sign up.
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