As an overview, the unified credit for estate and lifetime gift tax purposes is currently $5,340,000 per person. This means that a person can gift during their lifetime or at death up to this amount without implication of an estate or gift tax (or some combination of the two). This also includes GSTT gifts (generation-skipping transfer tax gifts) which are gifts to those 
more than one generation removed from the person making the gift. If you use up your unified credit and then pass away leaving assets to a GSST person (i.e., a grandchild), there would be not only an estate tax due on the transfer but an additional generation-skipping transfer tax as well.
Gifts that are considered lifetime unified credit gifts are those gifts in total (over your lifetime) that are beyond the annual exclusion amount (currently $14,000 per recipient per year – 2014). In other words, the unified credit is one pool of credit. If you made a $1 million gift to a child during your lifetime, that would be subtracted from what you could transfer to anyone at death (i.e., under current law, that would leave you with $4,340,000 to transfer to anyone estate and gift tax free).
Learn more about estate taxes by watching my video. If you have more questions about the federal estate and gift unified credit or estate planning in general, feel free to call my practice (760) 448-2220 and make an appointment. I’d love to help!