You can now make annual exclusion gifts to your kids, grandkids and great-grandkids of up to $13,000 per person, or $26,000 if you’re married. This type of gift will not have any gift or generation skipping transfer tax implications. Since IRA contributions are limited to $5,000, or $6,000 for those age 50 and older, annual exclusion gifts would more than cover what is required for the recipient to fully fund an IRA. In other words, as far as the IRS is concerned, you would be gifting cash that the recipient would use to fund or establish an IRA or Roth IRA. However, in order for anyone to make a contribution to an IRA, they have to have earned income. Thus, for your gift to fully fund an IRA, the recipient would need to have earned income at least equivalent to the IRA contribution. It sounds like this might rule out this strategy for the youngest in your family. However, many folks find utilizing annual exclusion gifts a convenient and effective way to reduce the size of their estate and benefit their heirs today.