Gifts Flashcards
What is the effect of a valid gift?
It passes title
What are the two types of gifts
(1) Gifts inter vivos
(2) Gifts causa mortis (made in contemplation of death)
What are the three requirements for gifts inter vivos
(1) Donative intent
(2) Valid delivery AND
(3) Valid acceptance
What does it mean to have donative intent?
Intent to pass title, meaning make an effective gift of the property
* Intent is NOT to pass possession, but title
* Donor must have present mental capacity
* Can give gift NOW (i.e., intend to pass title now), but hold a possessory interest (e.g., until the end of your life)
How is acceptance analyzed?
It is presumed when the gift is beneficial to donee
* Donee may refuse by an affirmative act (i.e., look for words or deeds indicating a refusal)
How may delivery occur?
(1) Actual physical delivery (i.e., handed over)
(2) Donee already in possession
* Don’t need to re-exchange possession
(3) Symbolic delivery (e.g., a key)
* Where the donor hands over some object, other than the item given, symbolic of the item
* Most commonly a “deed of gift,” which manifests donative intent, describes subject matter, is signed, and delivered
What considerations are specific for a check or promissory note given to a donee
Manual delivery does NOT fulfill delivery requirement until and unless check is cashed or note is paid
What happens if the donor hands a donee a check or promissory note that’s made out to donor by a third party?
When check of another is physically delivered, delivery satisfied (even if donor has not endorsed check or note)
* Compare with donor’s check–if it’s donor’s own check, not effective until cashed; if it’s a third-party check donor gives, effective upon delivery
Special considerations of stock certificates and life insurance policies
Physical delivery of shares of stock (stock certificates) with requisite donative intent is sufficient to satisfy delivery requirement
* Even if not endorsed and even though donee’s name is not entered on corporate books
* Effective even though donor continues to receive dividends up to the time of their death
What if a gift is given to a donee’s agent?
Valid upon delivery to third party
What if a gift is given by the donor’s agent
Not effective until third party delivers to donee
* Exception is if donee is minor, in which case, construe the middle person to be donee’s agent (i.e., valid upon delivery to the minor)
What must be shown for a valid gift causa mortis?
(1) Donative intent
* CHECK PRESENT MENTAL CAPACITY
(2) Delivery to donee
(3) Acceptance by donee
(4) Donor faces fair degree of certainty or likelihood that death is imminent and likely to occur AND
(5) The gift is not revoked before death
* Donor must die, but need not die from precise cause of death concerned about
In what ways may a gift causa mortis be revoked?
(1) Donor revokes by affirmative act
(2) Donee predeceases the donor (even if by seconds) OR
(3) Donor recovers
* Where this occurs, gift is revoked by operation of law except where the gift is realty
