Gift Deed Information
A Gift Deed can sometimes be called a:
- Deed of Gift
- Gift Agreement Between Individuals
- Inter Vivos Gift
What is a Gift Deed?
A Gift Deed is a document used to give a sum of money or to transfer ownership of property from one person or organization to another. It is often used to transfer gifts between family members, like if a parent wants to gift property to their child. A Gift Deed can also be used to donate to a non-profit charity or organization. Using this document helps prove that the gift is being given without any conditions or in exchange for compensation.
The person giving the gift is known as the donor, while the person or group receiving the gift is known as the recipient or donee. The donor must also name an agent who will act on their behalf to ensure the gift gets into the hands of the recipient. This is particularly important when the gift is being given to a minor.
What are the different types of Gift Deeds?
There are generally two different types of Gift Deeds: a revocable Gift Deed or an irrevocable Gift Deed. With LawDepot’s Gift Deed, donors can specify whether the deed is revocable or irrevocable, meaning whether or not it can be cancelled before the gift is transferred.
Some donors use a Gift Deed to state their future intention to give a gift. In this scenario, they hold on to the Gift Deed and retain the right to cancel the gift. This is known as a revocable Gift Deed.
More commonly, donors use an irrevocable Gift Deed to transfer ownership of the property as soon as the document is signed and delivered to the recipient. An irrevocable Gift Deed cannot be cancelled or withdrawn.
What types of gifts can I use a Gift Deed for?
Most donors use a Gift Deed when giving a gift to family members or close friends. A Gift Deed is often used to give away money, but it can also be used to transfer ownership of securities (like shares or stocks in a business), real estate, or personal property.
Another instance you may want to use a Gift Deed is when making a donation to a non-profit organization or charity. For example, you can use a Gift Deed when giving a monetary gift or donating a car, artwork, or other personal item.
Can I use a Gift Deed to transfer real estate?
In addition to personal items, a Gift Deed can also be used to transfer (or gift) real estate or real property (like a house or piece of land) with no consideration required. However, since real estate usually has value, the recipient may be required to pay tax as per the Internal Revenue Service (IRS) federal gift tax rules.
What is the difference between a Gift Deed and a Quitclaim Deed?
There are two main differences between a Gift Deed and a Quitclaim Deed: a Gift Deed can be revocable whereas a Quitclaim Deed cannot, and a Quitclaim Deed needs to include some sort of payment for the property being transferred in order for it to be valid, whereas a Gift Deed does not.
A Quitclaim Deed is typically used to transfer real property between family members or co-owners of a property, such as a husband and wife. For instance, if you are married but planning to divorce your husband or wife, and you both decide that only one of you should own the family home once the divorce is finalized, a Quitclaim Deed could be used to easily transfer your husband’s or wife’s interest in the property to you, or vice versa.
What information should be in a Gift Deed?
You should include the following information in your Gift Deed:
- Whether or not the Gift Deed can be revoked
- Type of gift: monetary or non-monetary
- Recipient (donee) information, including whether they are an individual or a charity
- Donor information
- Agent information
What is the difference between a Gift Deed and a Last Will and Testament?
Unlike a Last Will and Testament, which disburses your property upon death, a Gift Deed is typically used to transfer ownership of money or property while you are still alive.
Furthermore, while a Last Will is subject to revision and must undergo probate, in most cases neither the donor nor the donor’s family should be able to contest an irrevocable Gift Deed once it has been signed and delivered.
Frequently Asked Questions:
Gift Deed FAQ