It’s December of 2009, a time to celebrate the holidays and thoughts of buying gifts dominate the holiday season.  You might think about electronics or toys or gift cards, but it is the end of the year that some of you should be thinking about gifting money – large amounts of it.

For those that have estates larger than $1 Million dollars, you are going to be subject to the estate tax.  If you’re not that far over, there is a way to decrease your taxable estate and that is by gifting some of it away.  In this year, you are allowed to gift $13,000 per person gift and estate tax free.  If you’re married, you and your spouse can both gift $13,000 each, making each per person gift worth up to $26,000 per person, per year.

Take for example, if you and your spouse have 2 children and 4 grandchildren and your entire estate is $1,250,000 (that’s $1.25M).  You and your spouse can gift to each one of them $13,000 each, making that a total of  $156,000.  You can then gift to them again in January for the new year another $156,000.  In 2 months, you have effectively rid your estate of $312,000!  That brings your estate below $1M and neither you or your spouse is in any danger of incurring estate taxes.

As they say, give a gift that matters this year.