Retirement tax questions

No he cannot avoid the gift tax if it is given in one piece .... so if he doesn't want to file a gift tax return ( in which he probably won't own anything  anyway )  then ....

Max gift per year per person is currently $14K  so ...  He can give you $14K per year and $14K to your spouse & $14K to each child you have.  And repeat each tax year until the $125 is dispersed.