# Giving Lottery Money to Family Without Wrecking Anyone

> How to give lottery winnings to family in California: the $19,000 exclusion, $15M exemption, Form 709, tuition, 529s, AFR loans, and special needs trusts.

Source: https://ridleylawoffices.com/lottery-winnings-family-gifts-california/
Published: 2026-09-08
Updated: 2026-09-28
Author: Estate Planning Attorney Eric Ridley

Written by Eric Ridley, California lottery lawyer and estate planning attorney, Ridley Law. Last reviewed September 28, 2026.

In 2026 you can give any person $19,000 with nothing to file. Tuition and medical bills paid straight to the school or the provider are unlimited. Above $19,000 you file a Form 709 gift tax return, but no tax is due until you’ve used up a $15 million lifetime exemption. Your relatives owe no income tax on what you give them. The one gift that does real harm is cash to a relative on SSI or Medi-Cal.

The hardest part of a large win isn’t the money. It’s the third cousin who calls at nine on a Tuesday with a business idea.

Decide the policy before you decide any individual case. Pick the total number that goes to family, decide who counts as family, and decide what form the help takes. Then every request gets measured against something you settled calmly instead of something you’re deciding across a kitchen table while somebody cries.

One sentence, used on everybody: “I’ve set aside a fixed amount for family and I’m working through it with my attorney.” True, complete, and it doesn’t require you to argue the merits of anyone’s request.

## The free number is $19,000

In 2026 you can give any person $19,000 with no gift tax return and no effect on your lifetime exemption ([Rev. Proc. 2025-32](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf), § 4.42; IRC § 2503(b)). A married couple can give $38,000 to the same person, because each spouse has their own exclusion. Ten relatives at $19,000 each is $190,000 out the door in a single year, reported nowhere.

Your relatives don’t pay income tax on any of this. Gifts are excluded from the recipient’s gross income ([IRC § 102(a)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section102&num=0&edition=prelim)), and whatever gift tax obligation exists sits with the giver. The only exception worth knowing is what the gift earns after it lands. Interest and dividends on money you gave away are the recipient’s income from then on.

One trap in the free number: it only covers gifts of a “present interest.” Money you put into most trusts is a future interest, so a $19,000 gift to a trust for your nephew can require a return even though a $19,000 check to him wouldn’t. The [Form 709 instructions](https://www.irs.gov/instructions/i709) list present-interest gifts as a condition of not filing. Trusts can be drafted around this, and it’s one of the reasons the trust should be drafted before the money moves.

## Above $19,000: you file, you don’t pay

Give the same person $100,000 and you file a [Form 709](https://www.irs.gov/forms-pubs/about-form-709). That does not mean you owe tax. It means $81,000 comes off your $15 million lifetime exemption, and the tax bill only arrives after the whole exemption is gone. Most winners never get near it.

The $15,000,000 figure is the 2026 basic exclusion amount under [IRC § 2010(c)(3)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2010&num=0&edition=prelim), as amended in 2025, and it’s indexed for inflation starting in 2027. It’s one number that covers lifetime gifts and your estate at death combined. Whatever you use while you’re alive isn’t available at death.

What the return actually costs you is exemption, and exemption only matters if you have or will have a federal estate tax problem. Under $15 million per person, filing a 709 is paperwork. [Gift tax in 2026](https://ridleylawoffices.com/gift-tax-2026-california/) has the details, and California adds nothing here, because California has no gift tax.

The return is due April 15 of the year after the gift ([IRC § 6075(b)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6075&num=0&edition=prelim)), and an extension of your income tax return extends it too. People skip it because no tax is due. Don’t. A missing return on a large gift is the kind of loose end your executor inherits.

Giving $100,000 to each of four adult children in 2026:

| How you give it | Covered by annual exclusions | Comes off lifetime exemption | Returns to file | Gift tax owed |
| --- | --- | --- | --- | --- |
| Unmarried winner, $100,000 to each of four children | $76,000 | $324,000, leaving $14,676,000 | One Form 709, due April 15, 2027 | $0 |
| Married couple, community property prize, same four gifts | $152,000 | $124,000 from each spouse | Two, one per spouse | $0 |
| $19,000 to each of four children | $76,000 | $0 | None | $0 |
| $100,000 of tuition for each, paid to the schools | Not needed | $0 | None | $0 |

## If you’re married: splitting gifts and community property

A married couple can treat a gift made by one spouse as made half by each, which is how one spouse’s $38,000 check to a daughter stays inside two annual exclusions. That’s gift splitting under [IRC § 2513](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2513&num=0&edition=prelim). Both spouses have to consent on a Form 709, which means splitting requires a return even when each half is under $19,000.

In California you often don’t need the election at all. A ticket bought during the marriage is community property ([Fam. Code, § 760](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=760.)), and so is the prize. A gift of community property is treated as made one-half by each spouse automatically. The IRS instructions give the exact example: a $100,000 gift of community property is a $50,000 gift by each spouse, and each spouse must file a return.

So your spouse is a donor of every community property gift you make, and family gifting is a joint decision in fact and in law. If the marriage is shaky, large gifts out of community funds can become a fight later. That’s a family law question, and [lottery winnings in a California divorce](https://ridleylawoffices.com/lottery-winnings-divorce-california/) covers where the lines are.

## Tuition and medical are unlimited, if you pay them right

[IRC § 2503(e)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2503&num=0&edition=prelim) exempts two categories completely. Tuition paid to an educational institution, and medical expenses paid to the person providing the care. No dollar cap, no gift tax return, and it doesn’t touch the $19,000.

The word carrying all the weight is *directly*.

A $60,000 check to the university for your niece’s tuition is not a gift. A $60,000 check to your niece, which she then uses for tuition, is a $60,000 gift. Same money, same result for her, completely different tax treatment. The same rule runs on medical: pay the hospital, not the patient, and reimbursing someone after they’ve already paid doesn’t qualify.

This is the most underused provision in the code for a family with a windfall. You can put four grandchildren through private school and college, cover a sibling’s surgery, and pay a parent’s memory care indefinitely, and none of it consumes a dollar of exclusion or exemption.

Tuition means tuition. Room, board, books, and fees are ordinary gifts. A [529 plan](https://ridleylawoffices.com/gift-tax-2026-california/) handles those, and it has its own front-loading rule that lets you put five years of annual exclusions in at once.

## The 529 five-year election

A contribution to a 529 plan is a gift to the beneficiary, and ordinarily it’s measured against the $19,000 exclusion like any other. [IRC § 529(c)(2)(B)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section529&num=0&edition=prelim) lets you elect to spread a larger contribution ratably over five years.

In 2026 that means $95,000 per beneficiary from one person, or $190,000 from a married couple, in a single year with no exemption used. You make the election on a Form 709, so there’s a return even though nothing comes off your lifetime number. The catch is that you’ve pre-spent that grandchild’s exclusion for five years. A further cash gift to the same grandchild in year three eats into exemption.

## Lending instead of giving

Sometimes the right answer is a loan. It keeps the money in your estate, it lets a child buy a house or start a business without a bank, and it doesn’t use exemption, as long as it’s a real loan.

A real loan charges at least the applicable federal rate. The IRS publishes those rates monthly in a revenue ruling ([IRS index of AFR rulings](https://www.irs.gov/applicable-federal-rates)), and they come in three bands: short-term for loans up to three years, mid-term for over three and up to nine, long-term for anything longer ([IRC § 1274(d)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1274&num=0&edition=prelim)). For October 2026 the long-term rate is 5.22% compounded annually ([Rev. Rul. 2026-19](https://www.irs.gov/pub/irs-drop/rr-26-19.pdf)). For a term loan, the rate in effect the day you make the loan is the one that governs for the life of the note (IRC § 7872(f)(2)(A)).

Charge less than that and [IRC § 7872](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section7872&num=0&edition=prelim) treats the forgone interest as a gift from you and as interest income you received, whether or not a dollar changed hands. There’s a $10,000 de minimis exception for gift loans between individuals, and a softer rule for loans of $100,000 or less, but a lottery-sized loan to buy a house is past both.

Paper it like a stranger would. A written promissory note, a payment schedule, and a recorded deed of trust if it’s for real estate. Collect the payments. The interest is income to you, and California taxes it even though it doesn’t tax the prize.

Then, if you want, forgive some of it. Forgiving a debt is a gift ([Treas. Reg. § 25.2511-1(a)](https://www.ecfr.gov/current/title-26/chapter-I/subchapter-B/part-25/subpart-A/section-25.2511-1)), so forgiving $19,000 a year of a son’s note, or $38,000 if you’re married, uses the annual exclusion and nothing else. The risk is the pattern. A loan that nobody ever intended to collect looks like a gift on the day the money left, and it gets treated that way. Collect some payments, keep the paper, and make the forgiveness a separate decision each year. [Intra-family loans](https://ridleylawoffices.com/understanding-inter-family-loans-and-estate-planning/) covers the mechanics in more detail.

## The mistake that does the most damage

If someone in your family receives SSI, Medi-Cal, subsidized housing, or IHSS, do not send them money.

The SSI resource limit is $2,000 for an individual and $3,000 for a couple ([42 U.S.C. § 1382(a)(3)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1382&num=0&edition=prelim); [20 C.F.R. § 416.1205](https://www.ecfr.gov/current/title-20/chapter-III/part-416/subpart-L/section-416.1205)). It has not moved since 1989 and it is not indexed. Deposit $40,000 into your disabled brother’s account and he is over the limit the day it posts. Benefits stop. They stay stopped until the money is spent down, and the spend-down rules are their own maze. Depending on the program, he may also lose the medical coverage that was the actual point of the benefits, which can be worth far more than the gift.

The Medi-Cal side has its own numbers on a separate track. The non-MAGI asset test came back on January 1, 2026 at $130,000 for an individual and $65,000 for each additional household member. A lower limit is scheduled, and the statute behind it ([Welf. & Inst. Code, § 14005.62](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WIC&sectionNum=14005.62.)) was amended again in 2026, so check DHCS for the current number and date before relying on either. Treat the date as uncertain and the direction as clear. The current figures are at [Medi-Cal asset limits in California](https://ridleylawoffices.com/medi-cal-asset-limit-california/). And if the plan is to have a parent pass your gift along to siblings, that parent’s own future Medi-Cal eligibility runs into the [rules on giving assets away](https://ridleylawoffices.com/can-i-give-away-assets-to-qualify-for-medi-cal-california/).

The tool that fixes this is a [special needs trust](https://ridleylawoffices.com/special-needs-trusts/). Money you put in a properly drafted third-party special needs trust is never your brother’s resource, because he can’t demand it. The trustee spends it on things the benefits don’t cover, which is most of what makes a life worth living, and the benefits continue.

Third-party is the important word. A trust funded with your money, for his benefit, has no Medicaid payback requirement when he dies, and whatever is left goes where you said. A first-party trust, funded with money that was already his, does have a payback under [42 U.S.C. § 1396p(d)(4)(A)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1396p&num=0&edition=prelim). Which means the order of operations matters enormously: fund the trust, don’t give him the money and then try to fix it. [How special needs trusts work](https://ridleylawoffices.com/special-needs-trust-guide-california-2026/) covers the difference, and the [glossary entry on special needs trusts](https://ridleylawoffices.com/estate-planning-glossary-california/special-needs-trust/) has the short version.

## Buying a house for someone

Common, generous, and full of edges.

If you buy the house and give it to them, that’s a gift at fair market value, reportable above $19,000, which it will be. If you buy it and hold title yourself and let them live there, you own a house with a family member in it, which is a landlord relationship whether or not anybody uses that word, and you should be insured accordingly.

There’s a cleaner version of the first option. Give the cash, or lend it at the AFR, and let your daughter buy the house in her own name or in her own trust. She’s the buyer, the county assesses the house at her purchase price the way it would any sale, and there’s no later transfer from you to create a property tax question. A deed of trust in your favor, if it’s a loan, protects the money if her marriage ends.

If you later transfer California real property to a child, Proposition 19 governs whether the low assessed value carries over. Since 2021 the parent-child exclusion covers only a family home or family farm, and only if the child makes it their principal residence. The home also has to have been *your* principal residence ([Rev. & Tax. Code, § 63.2(a)(1)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=63.2.)), which means a house you bought for your son and never lived in doesn’t qualify no matter where he sleeps. A rental, a vacation place, or a house the child doesn’t live in gets reassessed at current market value. Even when it qualifies, the exclusion is capped: if the market value exceeds the factored base year value by more than the adjusted amount, currently $1,044,586 through February 15, 2027 ([Board of Equalization, Proposition 19](https://www.boe.ca.gov/prop19/)), the excess gets added back.

There are two deadlines and they’re different lengths. The homeowners’ exemption claim runs one year from the transfer. The exclusion claim itself, form BOE-19-P, runs three years, or until the property is transferred to someone else, whichever comes first.

Run your numbers through the [Prop 19 calculator](https://ridleylawoffices.com/proposition-19-calculator/) before you buy anything, and see [Prop 19 planning](https://ridleylawoffices.com/prop-19-planning/) for the structures and [Prop 19 and an inherited house](https://ridleylawoffices.com/prop-19-inherited-house-california/) for what happens at death instead of during life.

## Gifts to minors

A minor can’t own much outright in a way anyone can use. The two practical tools are a custodial account and a trust.

A custodial account under the California Uniform Transfers to Minors Act ([Prob. Code, § 3900 et seq.](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=3900.)) is simple and free to set up at any brokerage. The custodian manages it, and the child takes everything when the custodianship ends. The default is 18 ([Prob. Code, § 3920](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=3920.)). For a lifetime gift, you can push that to no later than 21 by saying so in the transfer. Only transfers made under a will or trust can run to 25 ([Prob. Code, § 3920.5](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=3920.5.)).

So a lifetime CUTMA gift puts the money in the hands of a 21-year-old at the latest. For $19,000 a year, that’s fine. For $500,000, it’s the wrong tool. A trust lets you choose the ages, stagger the distributions, name a trustee who isn’t a parent in a custody fight, and keep the money out of the child’s future divorce. [UTMA accounts and the age-18 problem](https://ridleylawoffices.com/utma-account-california-age-18/) walks through it.

## Grandchildren and the GST tax

Gifts to grandchildren carry a second federal tax, the generation-skipping transfer tax, which exists so wealthy families can’t skip a generation of estate tax. It has its own exemption, and for 2026 that exemption is also $15,000,000 ([IRC § 2631(c)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2631&num=0&edition=prelim); Rev. Proc. 2025-32, § 3.14).

For most families it never bites. An outright gift to a grandchild that fits in the annual exclusion has a zero inclusion ratio and no GST consequence ([IRC § 2642(c)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2642&num=0&edition=prelim)). Tuition and medical payments under § 2503(e) aren’t generation-skipping transfers at all ([IRC § 2611(b)(1)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2611&num=0&edition=prelim)). A larger direct gift automatically pulls GST exemption to cover it unless you elect out ([IRC § 2632(b)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2632&num=0&edition=prelim)).

Where it gets technical is trusts. An annual exclusion gift to a trust for several grandchildren doesn’t get the automatic zero, and the allocation has to be handled on the return. If you’re a winner in eight or nine figures, a dynasty trust that uses GST exemption early is one of the more valuable things you can do, and it’s also one of the easiest to get wrong. The [GST tax glossary entry](https://ridleylawoffices.com/estate-planning-glossary-california/generation-skipping-transfer-tax/) and [leaving assets to grandchildren instead of children](https://ridleylawoffices.com/can-i-skip-over-my-children-and-leave-assets-to-my-grandchildren-instead/) are the starting points.

## Give it in a trust, not outright

An outright gift to an adult belongs to that adult completely, which means it belongs to their divorce, their creditors, their business partner’s lawsuit, and their judgment at twenty-three.

The same money in a trust with a [spendthrift clause](https://ridleylawoffices.com/spendthrift-trust-creditor-protection-california/) is available to them and much harder for anyone else to reach. It costs a little more to set up and nothing extra to fund. For a young adult, for anyone in a shaky marriage, for anyone in a profession that attracts lawsuits, and for anyone who has struggled with money or with addiction, it’s the obvious call.

For minors, the question of [who controls the money and when they get it](https://ridleylawoffices.com/who-controls-minor-inheritance-california/) has a default answer under California law that most parents don’t like once they hear it. Write your own.

## The promise problem

“If I ever win, I’ll take care of you.” Half the country has said it to somebody. Now you’ve won, and somebody remembers.

A bare promise to make a gift isn’t a contract. California requires consideration for an enforceable contract ([Civ. Code, § 1550](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1550.)), and a verbal gift isn’t valid until the thing is actually delivered ([Civ. Code, § 1147](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1147.)). Your sister can be hurt that you didn’t keep your word. She generally can’t sue you for it.

A mutual promise is different. “If either of us wins, we split it” is two promises exchanged for each other, and that can be a contract. Coworkers who chip in on tickets, relatives who always buy together, and friends who trade numbers are all pools, whether or not anyone wrote it down. If that describes how the ticket was bought, the others may be co-owners rather than hopeful relatives, and [a written lottery pool agreement](https://ridleylawoffices.com/lottery-pool-agreement-california/) is how you settle it before the claim.

The other move people try is handing the winning ticket to someone else to claim. It doesn’t work the way they hope. The Lottery’s regulations define the Winner as the person who owns the ticket at the time it’s determined to be a winner by the draw (Lottery Regs, § 1.0, “Winner”), and the claim form is signed under penalty of perjury by the “rightful owner.” Transfer a winning ticket after the draw and you’ve made a gift of something worth the prize, with a Form 709 to match, and the person claiming it is signing a declaration about ownership that may not be true. If family members really shared in the ticket, the Multiple Ownership Claim is the correct route: the group representative signs the ticket and files [CSL 0896](https://static.www.calottery.com/-/media/project/calottery/pws/pdfs/claim-forms/csl-0896-multiple-ownership-claim-update.pdf), each other member completes a [CSL 0897](https://static.www.calottery.com/-/media/project/calottery/pws/pdfs/claim-forms/csl-0897-multiple-ownership-claim-update.pdf) attachment, and each share follows what that person contributed to the wager. [What to do before you claim](https://ridleylawoffices.com/california-lottery-before-you-claim/) covers the sequence.

And once a gift is made, it’s done. A completed gift can’t be revoked by the giver ([Civ. Code, § 1148](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1148.)). That’s the best argument for going slowly.

## How to say no

You’re going to disappoint people. That’s the cost of having something they want, and no structure makes it disappear. What you can control is how often you have the conversation and how much of yourself you spend on it.

Say no to the request, not the person. “I’m not funding businesses” is a rule. “Your business idea isn’t good” is a fight. The first one you can say to everyone, the same way, and it doesn’t get personal because it isn’t.

Don’t decide on the phone. “Let me think about it” is a complete answer, and so is “that goes through my attorney.” It buys you a day, and it moves the decision out of the room where somebody is watching your face.

Don’t explain your finances. Once you start justifying why $50,000 is too much, you’ve agreed that the question is how much, and the next conversation starts from your last number.

Let the structure be the bad guy. A trust with a trustee, a fixed annual gifting amount, a policy that tuition gets paid and cash doesn’t. People argue with you. They don’t argue nearly as hard with a document, and you get to be the uncle who paid for college instead of the one who said no to the boat.

For what comes after the claim, including the order to do things in, see [after you’ve claimed a California lottery prize](https://ridleylawoffices.com/california-lottery-after-you-claim/). The broader picture is in [what to do if you win the lottery in California](https://ridleylawoffices.com/what-to-do-if-you-win-the-lottery-california/), and the tax side is in [California lottery taxes](https://ridleylawoffices.com/california-lottery-taxes/).

## Questions I get asked

### How do I give money to family after winning the lottery?

Decide a total first, then use the structures. $19,000 per person per year is free and unreported. Tuition and medical paid directly to the institution are unlimited. Larger gifts require a gift tax return but no tax until you’ve used the $15 million lifetime exemption, and gifts to young adults or anyone with exposure should go into a trust rather than outright.

### If you win the lottery, how much can you give away tax-free?

In 2026, $19,000 per recipient per year with nothing to file, $38,000 from a married couple, plus unlimited tuition and medical bills paid directly to the provider. Beyond that you can give up to $15 million over your lifetime without paying gift tax, though you file a Form 709 for each year you exceed the $19,000. Tax at 40% starts only after the $15 million is used.

### How do I split lottery winnings with family without paying taxes?

If they had an ownership interest in the ticket, document it before the claim and file a Multiple Ownership Claim (CSL 0896, with a CSL 0897 for each other member). For prizes of $1 million or more, the Lottery pays each person directly. Under $1 million, the prize goes to one Designated Group Representative who distributes the shares. Either way, those aren’t gifts at all. If you claim the whole prize first and hand out shares afterward, they are gifts, and the difference on a large prize runs to millions.

### Can I give my parents money without them paying tax on it?

Yes. Gifts aren’t income to the recipient, so your parents owe nothing and report nothing. Any gift tax obligation belongs to you, the giver, and no tax is due until you’ve exhausted the lifetime exemption.

### Is there a lottery gift tax?

No special one. Gifts of lottery money follow the ordinary federal gift tax rules, and California has no gift tax. The federal rules give you $19,000 per person per year free, unlimited direct tuition and medical payments, and a $15 million lifetime exemption before any tax is due. The 40% federal rate only applies above that.

### What happens if I give money to a relative on SSI or Medi-Cal?

Their benefits stop. The SSI resource limit is $2,000 for an individual, and an outright gift puts them over it immediately. Use a third-party special needs trust instead, and set it up before the money moves.

### Can I pay off my child’s mortgage?

Yes, and it’s a gift in the full amount paid, reportable above $19,000. It doesn’t qualify under the tuition or medical exception. Whether it’s the right move depends on the interest rate and on whether you’d rather hold the money in a trust that keeps it out of a future divorce.

### What’s the best way to give money to family after winning the lottery?

Pay tuition and medical bills directly, use the $19,000 annual exclusion every year, front-load 529s for young grandchildren, and put larger amounts in trusts instead of handing them over outright. Use a special needs trust for anyone on benefits. Consider an AFR loan when you want the money back or want to keep it in your estate.

### Do I have to give my family anything?

No. The pressure is real and the obligation isn’t. Deciding a number in advance is what lets you say no without relitigating it every time.

[Talk to Eric](https://ridley.click/eric-60)

## Read this before you act on anything above

**This is general information, not legal advice.** Reading it doesn’t make you my client, and I don’t know your facts. Family size, marital status, and who’s on public benefits change the answers.

**Tax and benefit figures are for 2026 and they move.** The annual exclusion, the lifetime exemption, the applicable federal rates, and the Medi-Cal asset limits all change, and the scheduled Medi-Cal reduction was amended again in 2026. Confirm current numbers before you rely on them.

**Tax preparation is not my practice.** Your CPA or enrolled agent files the Form 709 and handles your income tax. I work with them on the structure.

**Family law is not my practice.** If gifts from community property are part of a marriage that’s ending, talk to a family law attorney.

**Lottery rules are the Lottery’s.** The regulations cited here are from the Commission-approved edition dated June 16, 2026.

Ridley Law, Eric Ridley, California Bar No. 273702. Practice limited to estate planning, trust administration, and uncontested probate, serving Ventura, Santa Barbara, and Los Angeles counties. This is attorney advertising.

## Sources

- [Rev. Proc. 2025-32 (2026 annual exclusion, basic exclusion amount, GST exemption)](https://www.irs.gov/pub/irs-drop/rp-25-32.pdf)
- [IRC § 2503(b), (e)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2503&num=0&edition=prelim)
- [IRC § 2010(c)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2010&num=0&edition=prelim)
- [IRC § 102](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section102&num=0&edition=prelim)
- [IRC § 2513](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2513&num=0&edition=prelim)
- [IRC § 6075(b)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section6075&num=0&edition=prelim)
- [IRC § 529(c)(2)(B)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section529&num=0&edition=prelim)
- [IRC § 7872](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section7872&num=0&edition=prelim)
- [IRC § 1274(d)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section1274&num=0&edition=prelim)
- [IRS, Applicable Federal Rates (AFRs) rulings index](https://www.irs.gov/applicable-federal-rates)
- [Rev. Rul. 2026-19 (AFRs for October 2026)](https://www.irs.gov/pub/irs-drop/rr-26-19.pdf)
- [IRC § 2631](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2631&num=0&edition=prelim)
- [IRC § 2632(b)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2632&num=0&edition=prelim)
- [IRC § 2642(c)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2642&num=0&edition=prelim)
- [IRC § 2611(b)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section2611&num=0&edition=prelim)
- [Treas. Reg. § 25.2511-1](https://www.ecfr.gov/current/title-26/chapter-I/subchapter-B/part-25/subpart-A/section-25.2511-1)
- [IRS, Instructions for Form 709](https://www.irs.gov/instructions/i709)
- [IRS, About Form 709](https://www.irs.gov/forms-pubs/about-form-709)
- [42 U.S.C. § 1382(a)(3) (SSI resource limits)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1382&num=0&edition=prelim)
- [42 U.S.C. § 1396p(d)(4)](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title42-section1396p&num=0&edition=prelim)
- [20 C.F.R. § 416.1205](https://www.ecfr.gov/current/title-20/chapter-III/part-416/subpart-L/section-416.1205)
- [Welf. & Inst. Code, § 14005.62](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=WIC&sectionNum=14005.62.)
- [DHCS, Asset Limit Frequently Asked Questions](https://www.dhcs.ca.gov/medi-cal/help/asset-limit-frequently-asked-questions/)
- [Fam. Code, § 760](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=FAM&sectionNum=760.)
- [Rev. & Tax. Code, § 63.2](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=RTC&sectionNum=63.2.)
- [California State Board of Equalization, Proposition 19](https://www.boe.ca.gov/prop19/)
- [Prob. Code, § 3900 et seq. (California Uniform Transfers to Minors Act)](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=3900.)
- [Prob. Code, § 3920](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=3920.)
- [Prob. Code, § 3920.5](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PROB&sectionNum=3920.5.)
- [Civ. Code, § 1550](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1550.)
- [Civ. Code, § 1147](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1147.)
- [Civ. Code, § 1148](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=CIV&sectionNum=1148.)
- [California State Lottery Regulations, Commission-approved June 16, 2026 (§ 1.0 definitions)](https://static.www.calottery.com/-/media/project/calottery/pws/pdfs/approved-regulations-6-16-26-ada.pdf?rev=5a7e710a3450408894ac05a78a790e57&hash=549D4E2D62F58965CB3EB1D562C46ECC)
- [California Lottery Claim Form](https://static.www.calottery.com/-/media/project/calottery/pws/pdfs/claim-forms/csl-1242-claim-form-2023.pdf?rev=c3654f6a07f7421e887a071be6aa8100&hash=1067E8EF26958148EACA78B3F0108B72)
- [California Lottery Multiple Ownership Claim, CSL 0896](https://static.www.calottery.com/-/media/project/calottery/pws/pdfs/claim-forms/csl-0896-multiple-ownership-claim-update.pdf)
- [California Lottery Multiple Ownership Claim (Attachment), CSL 0897](https://static.www.calottery.com/-/media/project/calottery/pws/pdfs/claim-forms/csl-0897-multiple-ownership-claim-update.pdf)
- [California Lottery Winner’s Handbook](https://static.www.calottery.com/-/media/project/calottery/pws/pdfs/winners-handbook-2020.pdf?rev=5159d46269e742e9b441301d28f3ab90&hash=917444B5EBD6F740B0A873B4BF932849)

## Related reading

- [You won the lottery in California: what to do before you claim it](https://ridleylawoffices.com/what-to-do-if-you-win-the-lottery-california/)
- [Won but haven’t claimed yet](https://ridleylawoffices.com/california-lottery-before-you-claim/)
- [Already claimed: what to do now](https://ridleylawoffices.com/california-lottery-after-you-claim/)
- [Lottery pool agreements in California](https://ridleylawoffices.com/lottery-pool-agreement-california/)
- [California lottery taxes](https://ridleylawoffices.com/california-lottery-taxes/)
- [Can a trust claim lottery winnings in California?](https://ridleylawoffices.com/trust-for-lottery-winnings-california/)
- [Gift tax in 2026: what California families can give tax-free](https://ridleylawoffices.com/gift-tax-2026-california/)
- [Special needs trusts in California](https://ridleylawoffices.com/special-needs-trusts/)
- [Medi-Cal asset limits in 2026](https://ridleylawoffices.com/medi-cal-asset-limit-california/)
- [Prop 19 planning](https://ridleylawoffices.com/prop-19-planning/)
- [Spendthrift trusts and creditor protection](https://ridleylawoffices.com/spendthrift-trust-creditor-protection-california/)