As we approach the end of the year, there’s one simple — but often overlooked — estate planning move that can make a big difference over time: using your annual gift allowance.

What Is the Annual Gift Allowance?

Every year, the IRS allows you to give up to a certain amount of money to as many people as you’d like — completely free of gift tax reporting. For 2025, that amount is $19,000 per recipient.

That means you can give $19,000 to each of your children, grandchildren, or anyone else you choose — without filing a gift tax return and without affecting your lifetime gift or estate tax exemption. The person receiving the gift doesn’t owe any tax on it either. They can simply deposit the money, and that’s it — no forms, no paperwork, no hassle.

“Use It or Lose It” Each Year

Here’s the key: your annual gift allowance does not roll over. If you don’t use your 2025 allowance before December 31, you can’t “make it up” later. Once the year ends, that opportunity is gone forever.

You’ll have a new allowance in 2026 (likely adjusted for inflation), but the 2025 limit disappears. So if you’ve been considering gifting money to family members, helping fund a grandchild’s education, or transferring wealth strategically, now is the time to act.

Why It Matters

Regularly taking advantage of the annual gift allowance can:

• Gradually reduce the size of your taxable estate

• Allow you to transfer wealth to loved ones during your lifetime

• Simplify future estate administration

• Let you see the benefits of your generosity firsthand

For most families, it’s one of the easiest and most effective estate planning strategies available — no trusts, complex documents, or legal filings required.

Final Thoughts

If you’re thinking about year-end estate planning, don’t overlook your annual gift allowance. It’s simple, tax-free, and a great way to support the people you care about most. Remember — if you don’t use it, you lose it.