What must spouses do when giving a joint gift using the split-gift technique?

When spouses give a joint gift using the split-gift technique, they must file a gift tax return with the IRS. This technique allows a married couple to combine their annual gift tax exclusions, effectively doubling the amount they can gift in a given year without incurring gift tax. However, to utilize this option, both spouses need to agree to treat the gifts made as coming from both of them equally.

By filing a gift tax return, the couple formally documents the gifts under the split-gift election, which provides clarity and compliance with tax regulations. This is essential for ensuring that the IRS recognizes the joint gifting strategy and applies the appropriate exclusions. Filing is particularly important if the total gift amount exceeds the annual exclusion limit for that tax year.

In contrast, while notifying beneficiaries, obtaining a written agreement, or updating a will may be prudent actions within the context of estate planning and gifting, they are not required by tax law when implementing the split-gift technique. The filing of a tax return is the key action that fulfills the legal obligation associated with this gifting strategy.