Thank you for the additional info. I'll share some thoughts.
1) On a personal level, I think it is wonderful that you are giving gifts and considering having the gifts be a way of teaching the kids about investing. If the gifts are in the kids' names, remember that when the kid reaches the age of majority, they can spend the gift on whatever they want to.
2) From a tax perspective, you are not required to file the form 709 as long as you do not exceed the maximum gift exclusion.
3) From a personal perspective, I don't file tax forms unless I am required to or unless it is advantageous to do so. I personally don't file form 709 because I never exceeded the exclusion amount.
4) As reported by other contributors to this discussion, both the gift and estate exclusions are currently indexed to inflation. Thus it is reasonable to think in constant dollars for longer terms - such as the 40-50 years you mentioned. Using constant dollars consider the following:
If you were to give each kid $15,000 per year * 2 Kids * 40 years = $1.2 Million, which is still far below the lifetime exclusion limit.
5) In my personal opinion, it is never too early to start thinking of and set up an estate plan, a will, and medical power of attorney documents.
6) In my personal opinion, I would not worry about filing the form 709. But you certainly have the option to do so.
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