A gift deed for property is a document, created for legality, which sees the transfer of ownership of a piece of property from the owner, (referred to as the donor) to someone else (referred to as the recipient). Gift deeds are common and are frequently used between family members, friends and acquaintances. They are only termed ‘gift’ when the recipient is not offering any form of compensation for the deed that they are receiving. For the donor to give the deed, they must be the legal owner of the property, and in the present. This is to say that a donor cannot gift the deed to someone else if they are hoping to own the property at a future time.
Formality in giving a gift deed for property
Given the value of the gift being transferred, a legal process needs to be undertaken. Notarization usually takes place, and for the signing of the deed to take place there has to be two witnesses present. It’s particularly important to ensure that the two witnesses do not have any interest in the piece of property that is being gifted. Once the signatures are put down, completing name change on property deed title, the transfer of ownership is complete, and the recipient can claim legal ownership, should there be any issue arising after the gift deed has been formalized.
If the recipient is a minor, they cannot be allowed to receive the property as per the law. However, if there is a guardian or a parent present, they can accept the gift deed for the minor, until they come of age.
The donor may sometimes offer what is called a revocable gift deed for property. This implies that the donor has every intention of transferring the ownership of the property, but at a future day. It’s termed revocable because the donor may at any one time, refuse to give the deed.
Complexities in giving a gift deed for property
The process of giving a gift deed is not without its fair share of complications in term of legality, forms and documents of deeds involved. If registration does not take place, the recipient may have a harder time contesting for ownership in a court of law. Gift deeds are offered when the donor has full rights on the property. This is to say that they are the sole owners of the property, and have a direct control of what happens to the property. But this is not always the case. When the deed being gifted was from a donor, who co-owned the property, it becomes a little more complicated. That’s because in shared tenancy, there’s survivorship clause that legally transfers ownership to one party, should the other one meet an untimely demise. Then there’s the issue of gift deed tax, which is a little more difficult.
When formalizing the giving of the gift deed for property, it is highly encouraged to get the services of real estate attorney whom are expert in property deeds transfer process. Their legal input is necessary to ensure that the recipient of the gifts does not run into any legal fixes because of an issue that was not previously addressed.