I am expecting a settlement check from insurance company for total $40,000. I am legally separated since January 2016. At the time of legal separation we made an agreement that she will get $60,000 from me because our house is worth 120k so she will get half of it. So now time has come where I can pay her 40k out of 60k. What is the best way I can give this to her? Should I be worried about gift tax or she should worry about gift tax? I understand these type of settlements are not income taxable but when I give to her as part of our separation agreement, does she need to worry about any tax consequences?