Coincidentally, for no real reason I ponder this sort of stuff too! But I'm much more pessimistic about the outcomes haha.

The real answer to this stuff would be to find a financial advisor, I suspect setting up a trust and giving out x amount of money per year is the most sane approach.

re: your options

Give them a lump sum of $X million. They eat the taxes the first year and handle the savings themselves.

Keep in mind people tend to be terrible with money/finance. And also keep in mind you cannot force people to do what you think they should do with their money.

There will be a good percentage of people that will neglect any advice about keeping that $$ for taxes & such and will come back to you in a year asking for more $$ to cover the the taxes and expenses that they are facing - after all you were the one that put them in that position.

The other percentage of people will have remembered to keep some $$ to cover taxes but will likely still bankrupt themselves in the next few years - they too will come back to you asking for more $$ because, well none of that would have happened without you starting it all.

Hopefully you'll have a few people that didn't blow it all & maybe invested it, or at least paid off their bills and mortgages.

Create a company and hire them to “work” one hour a month for a big salary. If you put $25m in an account, the interest covers the salary. They get a steady bonus income with the added bonus of getting the best insurance available. Is that legal?

Not sure on the legality, I guess you're essentially creating some sort of shell company? Keep in mind both the company and the "employees" will be facing taxes. Those "employees" are going to end up in entirely new tax brackets depending how high you bumped their yearly incomes.

On the upside they would be paying way, way more into social security so at least they'll end up with a bit more coming back in their later years if social security still exists. And you could maybe do things like auto-enroll them into a 401k and invest that into retirement savings.. as long as each "employee" doesn't somehow screw that up since each 401k account is technically their own and you can't force your will on people to do things with their own money.

Set up a “shared” checking account they can use to pay for…whatever. But would these expenses count towards the gift tax? I do not know.

Not sure on that one but I suspect that's just another version of gift tax like you said. You'd better talk to a financial advisor.

Buy houses and let them live there rent-free. I don’t really like this one because I don’t want to be a lord to my friends and family.

The smart ones will immediately sell, even if they sell at a loss they'll make free money. The less smart ones will come back to you ever few years when something needs to be done with the house, it's very possible many of those people will be living in houses they can't actually afford to maintain and upkeep and you put them in that situation in the first place...