There are three basic things to remember when getting started with estate planning:

The Estate-Tax Exemption

For 2013 you can leave bequests (gifts to other individuals upon your death) worth up to $5.5 million free of any federal estate tax. This is the so-called estate-tax exemption. If you're married, both you and your spouse are entitled to separate $5.5 million exemptions. If one spouse dies and does not use up his or her full exemption, the leftover exemption amount can be left to the surviving spouse.

The Gift-Tax Exemption

You can also give away a cumulative total of up to $5.5 million to relatives, friends, whomever during your life without owing any federal gift tax. This is the so-called gift-tax exemption. If you're married, both you and your spouse are entitled to separate $5.5 million gift-tax exemptions.

Gifts made under the so-called $14,000 tax-free-gift rule (more on that below) will not trigger any federal gift taxes, nor will they reduce your federal gift-tax or estate-tax exemptions. However, gifts in excess of the $14,000 "freebie" will reduce both exemptions dollar for dollar. Only if you're so generous during your lifetime that you completely burn through your $5.5 million gift-tax exemption will you have to start paying federal gift tax. Even then, the tax only hits gifts in excess of the $14,000 figure.

Bottom line: Relatively few people will ever reach the point of actually owing any federal gift tax.

The $14,000 Annual Gift Tax Exclusion

For those with large estates, the $5.5 millionestate-tax exemption isn't enough. That's where the $14,000 tax-free gift rule comes in.

The benefit of making tax-free gifts is twofold: It reduces your taxable estate, and it shifts the taxable income from the gifted money to your kids, who may be taxed at a lower rate than you. This $14,000-a-year strategy works particularly well for those who wait until late in life to start serious estate planning.

Let's say, for instance, you and your spouse have an estate worth about $13 million and you've built in almost no protection against the IRS. If you both die tomorrow, the federal estate tax could be $800,000. Say you have two adult children (both married) and four grandchildren, you and your spouse could together give away $224,000 a year ($14,000 from each of you to both children, their spouses and four grandkids) and cut that tax bill significantly in just a few years by reducing your estate with gifts. (Gifts under the $14,000 rule don't cut into your $5.5 million gift-tax or estate-tax exemptions.)