As most of you know, there is an annual amount that you can give to any one person without incurring a gift tax. In 2012 the amount of this gift tax exemption is $13,000. Normally, if you exceed the gift exemption, you incur a potential gift tax liability (currently 35%).
However, you have a unique gifting opportunity whereby total gifts up to $5.12 Million can be made before December 31, 2012, when the lifetime gift tax exemption amount drops to $1 Million. Thus, if you have a substantial estate that will otherwise pass to your children, you might be able to gift a significant portion of your estate to them in 2012.
Of course, the amount that you can actually gift in 2012 will be affected by other lifetime gifts that you have already made that exceeded the effective annual gift exemption amount. Talk to your tax advisor or estate planning attorney to find out just how much you can give in 2012.