They will not be "hit with a gift tax" in any case unless they have substantial other assets.
"Why it pays to understand the federal gift tax law
If you give people a lot of money or property, you might have to pay a federal gift tax. But most gifts are not subject to the gift tax. For instance, you can give up to the annual exclusion amount ($13,000 in 2009 and 2010) to any number of people every year, without facing any gift taxes. Recipients never owe income tax on the gifts."
"And you can give up to $1 million in gifts that exceed the annual limit—total—in your lifetime, before you start owing the gift tax. If you give $15,000 each to ten people in 2009, for example, you'd use up $20,000 of your $1 million lifetime tax-free limit—ten times the $2,000 by which your $13,000 gifts exceeds the $12,000 per-person annual gift-free amount for 2009."
"The general theory behind the gift tax
The federal gift tax exists for one reason: to prevent citizens from avoiding the federal estate tax by giving away their money before they die."
"The gift tax is perhaps the most misunderstood of all taxes. When it comes into play, this tax is owed by the giver of the gift, not the recipient. You probably have never paid it and probably will never have to. The law completely ignores gifts of up to $13,000 per person, per year, that you give to any number of individuals. (You and your spouse together can give up to $26,000 per person, per year to any number of individuals.)"
"If you have 1,000 friends on whom you wish to bestow $13,000 each, you can give away $13 million a year without even having to fill out a federal gift-tax form. That $13 million would be out of your estate for good. But if you made the $13 million in bequests via your will, the money would be part of your taxable estate and would trigger an enormous tax bill."