The federal gift tax is unified with the estate tax. There is a $5.25 million unified exclusion in place in 2013 that encompasses all of the taxable gifts that you give along with the value of your estate.
In other words, if you gave $5.25 million in gifts that were taxable throughout your life, you would use up this exclusion; and all of your estate would be subject to the estate tax.
So giving gifts using the lifetime exclusion is not really in any way preserving your available estate tax exclusion because the two taxes are unified.
But you can still transfer assets to others each year within a certain limit without these transfers counting against your lifetime exclusion.
The annual gift tax exemption for 2013 has been set at $14,000. This is a $1000 increase over the $13,000 that was in place last year.
Each taxpayer may give up to $14,000 to another person this year without incurring any gift tax liability, and you can give $14,000 to a second person, and $14,000 to a third person, and so on, to as many people as you like (if you have the cash to do it). A married couple can combine their exemptions and transfer as much as $28,000 to any number of people in 2013 without using up any of their lifetime exclusion.
Though the exact exemption amount is subject to change, this annual exemption can be used over a number of years to significantly reduce the taxable value of your estate as you transfer resources to family members in a tax-free manner.
The tax code also allows you to pay the school tuition of students as a gift free of taxation without tapping into your lifetime exclusion. This is in addition to the $14,000 annual exemption, and there is no limit to the amount that you can give in tax-free tuition gifts.