[punkass]

First question...how much would their estate be worth when they die?

$11k each, so you can give $22k/year to them. If you are married, then it's $44k. And this number I believe went up last year.

Before doing anything this drastic that could spark tax consequences, I'd speak to a tax attorney or an accountant that KNOWS their stuff. Who knows what other things you have to watch out for that OOT doesn't know.