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If your parents have substantial assets and want to reduce their tax liability, a tax free gift to their children may help reduce the value of their estate while they're alive. They are allowed to give a maximum gift of $12,000 per year to each child without incurring a gift tax. If those same gifts were given after your parents' deaths, and they were subject to estate taxes, their value would shrink by at least 39 percent.
Does this gift also apply to grand children? Is there a 5 or 7 year look back on this money? I cant get over that people do not know.