The annual gift tax exclusion is generally used by couples and individuals who are comfortable with the amount of their wealth and are willing to give up the use and enjoyment of some of it during their lifetimes. It is also used by married couples with assets in excess of their combined federal exclusion amount, or single individuals with assets in excess of the federal exclusion amount, who want to minimize the impact of federal estate taxes on their excess assets. In addition, the annual exclusion is sometimes used by married couples who want to avoid federal estate taxes, but they do not want to bother using a credit trust. These couples monitor their wealth closely and make annual gifts that keep their combined wealth from increasing above the federal estate tax applicable exclusion amount.
If gift taxes apply, you must file Form 709: U.S. Gift (and Generation-Skipping Transfer) Tax Return.