A gift is defined as a voluntary transfer of wealth from one person (the donor) to another (the donee), resulting in a decrease in the donor’s wealth and an increase in the donee’s wealth. It is important to note that a promise of a future gift is not legally binding.
Gift of movable property
All property that is not immovable belongs to the movable property category. Movable property includes everything from movable property, assets without physical characteristics, intellectual property rights and limited rights to immovable property. All types of movable property can be given as a gift to someone else. Such gifts are tax-free.
There are no specific formal requirements for the gift of movable property, but it may be useful for evidential purposes to draw up a deed of gift. If the gift is conditional in any way, this must be clearly stated in the deed of gift.
Gift of immovable property
Like movable property, immovable property can be given away tax-free as a gift. For a gift of immovable property to be valid, it must be made in writing by drawing up a deed of gift. If the deed of gift does not comply with the formal requirements, the gift may be declared invalid. The written deed of gift needs to include a declaration that the donor is transferring the property as a gift to the donee and information on how much of the property is being transferred.
Both the donor and the donee need to sign the deed of gift. If the gift is conditional, this must also be stated in the deed of gift itself. The signature of the donor must be witnessed by two persons in order for the donee to apply for a title deed. The title deed must be applied for within three months.
Intersection of gift law and inheritance law
Gift law intersects with inheritance law, raising issues such as whether a gift should be considered an advance on future inheritance or whether it should be treated as separate property. If the donor passes away shortly after making a gift, questions may arise regarding the potential disadvantage to the donor’s heirs. To avoid ambiguities and potential disputes, a well-drafted deed of gift is strongly recommended.
We will assist you
At Advantage law firm, we specialize in drafting precise deeds of gift to prevent future conflicts. We also provide assistance in determining whether a gift has disadvantaged an heir and whether conditions exist for the potential return of a gift. Contact us for expert guidance and further assistance.
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