What tax issues should we be aware of when my dad cashes in his saving certificates and retirement CDs?

Dad has plenty of money to live on and has decided he wants to gift a big portion of his saved money to his children and grandchildren. We understand that $12,000.00 is the amount he can gift this year without any gift tax form completion needed. Our concern is that he is cashing in savings certificates varying in amounts from $4500-$6500 and a retirement CD of $38,000.00. Will he be in trouble once tax time rolls around? His monthly income from pensions and social security are around $2500.00. What issues should we be concerned with him doing this?