Gift Giving – Understanding the legal definitions, elements and categories of gifts

Voluntary transfer

The legal definition of a gift encompasses “the voluntary transfer of property from one person to another, without the expectation of payment or compensation. A gift is meant to be given without undue influence, peer pressure or coercion.” In principle gift-giving is normally an act of love, appreciation and kindness but there are legal factors which one needs to keep in mind when determining whether particular property was a gift or not.

WHAT ARE THE ELEMENTS OF A GIFT?

 The giver of the gift is referred to as the Donor, the person receiving the gift is the Donee of such a gift. Thus, both the Donor and Donee needs to satisfy himself/herself of the following:

  • CAPACITY TO DONATE– Given that a gift is given voluntarily without reward or favour, the Donor needs to have the ability in order to transfer property. In order to transfer property or donate same you need to be 18 years old, of a sound mind and understand and appreciate the consequences that flow from giving of a particular gift. It is trite law that one cannot give what you do not own, therefore the Donor must be capable of disposing/donating the property whether such property is valuable or not.
  • INTENT OF THE DONOR– the intent of the Donor is important as it should be to transfer the said property with no expectation or compensation or payment.
  • DELIVERY TO DONEE– This is an affirmative act made by the Donor who ensures that the gift is transferred from him/her directly to the Donee to accept.
  • ACCEPTANCE BY DONEE– the Donee in return is required to affirmatively accept without undue influence or pressure the property/gift given.

THREE CATEGORIES OF GIFTS

Legally speaking there are three categories namely:

  1. INTER VIVOS GIFTS – these are gifts transferred during the life of the Donor. Simply put the Donor is still alive when donating or gifting the particular person or person with property. The nature of such gifts are irrevocable meaning should the relationship cease that no return to sender (donor) takes place once transfer of the gift has been completed.
  2. CAUSA MORTIS GIFTS – these particular gifts are transferred in anticipation of the death of the Donor. Transfer only takes place upon the Donors death and can be revoked by the Donor for any reason.

“For example:  Jo on his death bed states to Jane “you have been so good to me, I want you to have my Porsche”- however for some reason Jo never dies but instead receives a clean bill of health and decides to give his Porsche to Lucy. Jane will have no right to the Porsche as transfer of the gift would have only taken place on the death of  Jo making the gift to Jane irrevocable in nature.”

  1. TESTAMENTARY GIFTS– personalised gift-giving through a last will and testament. In contrast to the gift causa mortis, the Donor is dead and the transfer of such a gift takes place only after his death. Further, the Donee (beneficiary/heir) may revoke the gift and such decision is accepted and regulated by the law of succession.

It can be said that joy always accompanies the receiving of a gift but one must always ensure that the intention behind the gift is one that is not conditional on an act or reciprocal duty as if in that instance it may be easily be revoked.

Contact us should you be party to a dispute of this nature as it is often wise to seek advice in order to prevent short changing yourself through misinterpretation of the law.

 

For further information, please do not hesitate to contact us on (021) 945-1237

Claire Smidt
claire@bbplaw.attorney
Associate

 

Please feel free to visit our updated website: www.bbplaw.attorney

 

Leave a Reply