What is the difference between the lifetime gift tax exemption and the annual exclusion when it comes to gifting assets?

The lifetime gift tax exemption is the total amount of gifts an individual can give over their lifetime without having to pay gift tax. The annual exclusion is the amount of money or assets that can be gifted to an individual each year without triggering gift tax. The main difference is that the lifetime exemption applies to the total amount of gifts given over a person's lifetime, while the annual exclusion is a yearly limit on the amount that can be gifted tax-free to each individual.