@EricBBL
<<What boggles my mind is that the donor uses up the lifetime gift allowance exemption to do the gift>>
what do you mean? it's the same $12.06mm per person regardless of the timing. Whether the home is gifted now or inherited later, its value goes against the $12.06mm lifetime exemption that can pass tax free to the beneficiaries. (Let's leave the annual $16,000 gift per person to the side for simplicity)
and better to gift an asset that is expected to appreciate faster than inflation now if you truly believe you will have an estate that exceeds $12.06mm (or whatever the inflated numbrer is in the future)
