[CFP, Estate] 15, Splitting Gifts Between Spouses

Turn one $19 k gift into $38 k—if you follow the rules.

🎯 Why This Topic Matters for the CFP Exam

Gift-splitting shows up in every exam cycle because it blends estate-planning theory with tax-return mechanics. Mastering it earns you points in both the Estate Planning and Tax Planning domains and helps you spot planning opportunities for real-world clients.

Key Stat for 2025: The annual exclusion is $19,000 per donor, so a married couple can shelter $38,000 per donee with a split-gift election. (irs.gov)

🧩 Main Concept Breakdown

🔑 Part

What You Must Know

Mini-Memory Cue

1️⃣ Annual Exclusion

$19 k per donor per donee in 2025. Indexes annually.

“19 = Open-hand 🎁”

2️⃣ Gift-Splitting Election

Couples file Form 709 and both spouses sign to treat all gifts made by either spouse that year as half-and-half.

“Split = Sign Paper Lock-in Inclusive Total”

3️⃣ Eligibility Rules

• Married at the time of each gift and at year-end

• Both U.S. citizens or residents

• Election covers every gift that year (no cherry-picking)

“Must be Married & Mutual” 💍

4️⃣ Mechanics

Each spouse reports half the value on separate Form 709s. No tax due if each half ≤ exclusion.

“Two 709s ➡️ Zero tax” 📝

5️⃣ Strategic Uses

• Double exclusion for large one-off gifts

• Front-load 529 plans (5-year averaging)

• Shift assets out of taxable estate before 2026 TCJA sunset.

“🚀 Launch wealth early”

📚 Deep Dive: Step-by-Step Example

Scenario: Pat (P) and Sam (S) want to gift $60,000 cash to their daughter Maya in 2025.

  1. Without Gift-Splitting
    P is the sole donor.

    • Exclusion used: $19,000

    • Taxable gift: $41,000 (counts against P’s lifetime exemption).

  2. With Gift-Splitting

    • Each spouse deemed to give $30,000.

    • Exclusion per spouse: $19,000

    • Taxable gift per spouse: $11,000

    • Tax shown on both Form 709s: $0, but each spouse’s lifetime exemption is reduced by $11,000.

Memory Hook: “30 each, 19 off the top, 11 goes on the clock.” ⏰

⚠️ Common Exam-Day Mistakes (avoid these!)

⚠️ Trap

Why It’s Wrong

Fix

“No return needed if the split wipes out tax.”

Both spouses must still file Form 709, even when net gift tax is zero.

Always file and sign!

Splitting gifts of community property doesn’t require election.

Election is required for all property types—separate or community.

Check the box on Form 709 Part 1.

Cherry-picking only the big gift to split.

IRS rules force the election to cover every gift either spouse made that year.

Track all gifts before electing.

Forgetting GST implications.

Split gift counts half to each spouse’s GST exemption, too.

Allocate GST on each Form 709.

Overlooking non-citizen spouse rule.

If one spouse isn’t a U.S. citizen/resident, gift-splitting isn’t allowed.

Confirm residency status first.

🎶 Study-Session Boost

Pop on the free Spotify playlist “Financial Planning Essentials” while you drill practice questions—it’s curated for steady focus without lyrical distraction: https://open.spotify.com/playlist/6GUIZvnpaiOiYmXkanqwZ8 🎧

📝 Quick-Reference Table

Year

Annual Exclusion (Per Donor)

Max Per Donee w/ Split

Form 709 Required?

2024

$18,000

$36,000

2025

$19,000

$38,000

Tip: Adjust numbers each January; inflation updates often appear in the December CFP exam window.

🧠 Retention Hacks

  • Emoji Association: Picture two 💑 spouses turning one 🎁 into two 📦—that’s gift-splitting.

  • Acronym “SPLIT”:
    Spouses
    Paperwork (Form 709)
    Legal marriage all year
    Include all gifts
    Twice the exclusion

  • Practice Drill: Create three scenarios—cash, appreciated stock, and 529 lump-sum—then draft the corresponding Form 709 entries. The act of writing lines up with exam simulations.

🚀 Action Plan for the Week

  1. Calculate split vs. non-split outcomes for at least five past exam problems.

  2. Draft a mock Form 709 for a $120 k 529 contribution using five-year averaging + split.

  3. Quiz yourself on the SPLIT acronym—write it from memory each morning.

  4. Listen to 30-minute blocks of the Financial Planning Essentials playlist to cement recall.

Stick to this micro-plan and the next time you see a gift-splitting question, you’ll answer in under one minute—leaving extra brain fuel for the tougher Estate vs. GST allocation items.

🌟 Final Takeaway

Gift-splitting is simple math wrapped in strict paperwork. Respect the rules, file the forms, and you’ve doubled your clients’ (and your exam) advantage.