Reducing Your Taxable Estate Through Lifetime Gifts of the Annual Exclusion Amount

If your estate passing to your children is likely to exceed $3,500,000 ($2,000,000 if death occurs before 2009 ) (the amount sheltered by your federal exclusion amount), you should consider lifetime gifts to reduce the size of your estate. For 2007 through 2009, the federal estate tax rate on the amount in excess of $3,500,000 left to your children and grandchildren is 45%.