Q: I would like to give my children cash they can use in the future for college or some other large expense. I’d also like to give lump sums to my siblings. Are cash gifts tax-exempt?

A: The IRS allows tax-free gift giving under certain circumstances. For instance, you can give up to $10,000 in money or property annually without the donors incurring any gift tax. This amount can increase to $20,000 per person if the donors are a married couple who elect “gift-splitting.” To qualify for the exclusion, the gift must be of a “present interest,” which means that it is available to the recipient now, rather than in the future. For a gift in trust to qualify for the exclusion, the trust beneficiaries must have the right to withdraw from the trust, although that right can be limited by amount and/or time frame.

Payments for tuition and medical expenses are not subject to gift tax and are not subject to the $10,000 limit. However, payments must be made directly to the institution or medical provider.
Oh, and while you’re in a generous frame of mind …