The annual gift tax exclusion is now $14,000 per person, per year; There is no New Jersey gift tax and there will be no New Jersey income tax consequences to you or your children; As the other attorneys noted, there may be more efficient ways to gift or transfer assets to reduce your estate for estate taxes or to avoid long term care costs; You have a lifetime gift tax exclusion of $5,120,000 and may be able to gift or transfer more than the annual exclusion, depending on your reasons for the transfers. Good luck!
There is a combined federal estate gift tax system. You alone can give $14,000 to as many people as you want generally or make a combined gift with your spouse of $28,000 (even if just one spouse is providing all the funds). So, if you were married, you and your spouse could give $28,000 to child A and $28,000 to Child B etc... without using any of the federal estate gift tax credit. You should consult an estate planning attorney before making gifts, as there are frequently more efficient ways of making gifts.
Mr. Bernick is correct. Actually you can give $14,000 to each donee (recipient). If you give about that amount (or $28,000 for gifts if you are married) you simply may need to file a federal gift tax return, but that does not mean you have a gift tax to pay. The amounts you gift each year over and above the allowable amount go against your lifetime gift and estate tax exmption which currently is 5.12 million indexed for inflation (or 2x that for a couple), so this means that unless you give away quite a lot during life and at death you probably won't have a gift or estate tax when you pass. Recipients in NJ also have no income tax issues on a state or federal level. It is possible that depending on the size of the gift and the proximity of the gift to death that it will effect your NJ estate tax.
This is not legal advice nor intended to create an attorney-client relationship. The information provided here is informational in nature only. This attorney may not be licensed in the jurisdiction which you have a question about so the answer could be only general in nature. Visit Steve Zelinger's website: http://www.stevenzelinger.com/