An often overlooked source for the dollars to make a down payment on a new home is tax free gifts from wealthy relatives.

Let’s say a young couple’s parents (grandparents, etc.) have built up a sizable estate during their lifetime and upon their deaths fully intend to leave a substantial inheritance to the couple. With careful planning, the parents or grandparents could give the couple part of the money now and, at the same time, possibly reduce overall estate taxes that may be due when they die.

Under current law, any individual can gve a gift equal to $11,000 every year without paying any gift taxes. A married couple together can claim an annual gift tax exclusion totaling $22,000 a year. Any attorney, financial planner or related professional who specializes in estate planning and taxes can provide details about how to set up a gifting program that can benefit the benefactor as well as the recipients.