Understanding the 3k gift to children

I am trying to understand the effect/advantage of gifting 3k to children each year in relation to inheritance tax.

If myself and my husband each gift 3k over 10 years does that 60k reduce the potential inheritance taxliability for the child on our death. The overall effect then is that not only does the child
receive the gift in their lifetime but their eventual tax bill will be reduced with the 60k being subtracted from the tax bill. Is this correct. Does revenue require proof that the gift was paid out each year. Is done using a particular form from revenue or how does this work.

The 3k gift each year is tax-free and does not count towards the total inherited on death of which the balance over the tax-free threshold will be taxed.

In the example you cited, the 60k is ignored by the Revenue.

My mil is gifting €3,000 to each of her grandchildren this month and has done for the past number of years. This year my husband and I are gifting €3,000 each to each of our two children. That means that in 2014 our two children will receive €9,000 each which will be tax free. My brother is now keen to start doing the same for all his nieces and nephews. If he does, then next year my two children will receive €12,000 each tax free.
It is going into further education savings for them both! But the accounts are in their own names and the payments made by their grandmother are cheques in their own names and from their dad and I it is by online bank transfer to their own bank accounts.
I still am more than happy that the Revenue are satisfied that this money is not liable for any tax and will not be an issue when they come to inherit from us.

Thanks for the responses folks. I just need to know how you prove the payments to Revenue?? Is this a requirement? In other words how would Revenue know whether the payments are actually made - are bank statements sufficient?

Not meaning to go off track here but does the 3k gift need to be paid over as a lump sum or could it be done in monthly installments. ie €250 monthly direct debit

Can anyone refer to the exact rules on the www.revenue.ie site showing the rules, regulations or workings applying to this exemption please?

Thanks.