What is a Gift in Law?
A gift is a voluntary act of transferring property without expecting or receiving anything in return, as defined under California law. Further we will explore at what point does a transfer become a gift and how intent, delivery and acceptance factor into the legal definition.
To determine if a transfer qualifies as a gift, the court looks to several factors. The very first is the intent of the transferor. The person giving the gift must intend to give the recipient an immediate gift and relinquish all control over the property. The next factor is delivery. The transferor must then deliver the item , transferring possession and control to the recipient. This can be done physically with the transferor personally handing the item to the recipient. Or, the transferor can give the recipient the means to control the property and title of the property can change hands through a deed or a bill of sale. The last element required for a gift is acceptance, which usually occurs with words or conduct that conveys to the court a clear intention to accept the property. Heiman v. Brooks, 159 Cal. App. 3d 1117, 1122 (1984).
When You Can Get Your Gift Back
Although gifts are generally irrevocable unless otherwise stated in writing, this does not mean that there are not any circumstances allowing for their revocation. If a gift was obtained through fraudulent means; if undue influence was exerted over the donor; or if a condition was attached to the gift that has not been fulfilled, the donor may be able to legally reclaim the property as their own. And, if the person who made the gift dies before the conditional requirements are met, the condition will be automatically removed from the promise. However, this does not mean that the lifetime gift that was subject to a condition will now be considered a final gift to the donor. It is important to understand, however, that to preserve any right to reclaim the gift, the conditions must be clear and unequivocal, such as a right of reverter clause.
Gifts Made with Contemplation of Marriage
In addition to the division of property issues, family law cases often involve claims over gifts of various types. In particular, the issue of who gets various gifts that were given in anticipation of a marriage seems to come up on a fairly regular basis. Here in Washington state, the general rule is as follows:
…if a donor gives a gift to the donee in recognition of a contemplated marriage, then the gift is presumed to be one in contemplation thereof; but if the marriage does not take place the recipient must return or account for the gift to the donor if the donor would not have made the gift had he or she known that the marriage was not to take place, except to the extent to which the recipient has changed his or her position in reliance on the gift.
Before breaking this rule down, I want to highlight the primary issue that arises with the gifting of items that were exchanged between an engaged couple. That is, where is the line drawn? For instance, would an engagement ring be a gift in contemplation of marriage – yes! Would the wedding band be a gift in contemplation of marriage – yes (typically)! Would the wedding gown be a gift in contemplation of marriage – possibly! Would the car purchased for the couple be a gift in contemplation of marriage – likely! Would the items contained in the household after the marriage – likely not! So long as these things are acquired in the hopes of a marriage taking place, they should be considered to fall within this definition of a gift given in anticipation of a marriage.
So we have established the various types of items that may be gifts in anticipation of a marriage, now let’s discuss what happens when the engagement falls apart and where the line is drawn in terms of whether a gift giver wants their gifts back. To do this, we must first break down the rule and its exceptions. The general rule is that if the marriage fails to go forward, any items exchanged in anticipation of said marriage will be given back to the donor; unless (in the case of the wedding ring), the gift cannot be reasonably returned (e.g. the wedding ring was lost or destroyed).
The exceptions to this general rule or whole cloth here. There is not a specific case that has outlined the exceptions, but courts have established that the Donor must prove both of these elements and that it is clear that the donor would not have made the gift had he/she known that the marriage was not to take place.
What is a Conditional Gift?
When it comes to wills and estates, there’s a lot of focus on "conditional gifts." A conditional gift is any gift or bequest that is tied to the occurrence of some event, usually a reaction by the recipient. Conditional gifts are most often, but not exclusively found in wills. For example, Bob leaves $50,000 in trust, conditional on Mark, Bob’s estranged son, coming to family dinner every Sunday for a year. Bob leaves $5,000 in trust, conditional on Patricia, his wife, holding his hand at the time of death. Bob leaves his house in trust, conditional on Andy completing a marathon. In these examples, the gift or bequest transfer to Mark, Patricia or Andy from Bob’s estate would only normally occur if the condition: (a) occurred or (b) was satisfied. Simply put, Mark, Patricia and Andy are still entitled to receive the gift or bequest from Bob’s estate if the conditions: (a) occurred or (b) were satisfied.
Indeed, under Ontario law, conditional gifts are valid unless a condition is contrary to public policy or the law. Since the examples above are not illegal, conditional gifts are perfectly valid under the law. Of course, for these conditional gifts to become effective, there has to first be a transfer to the intended recipient. If, for example, the house in our above example was never transferred to the trust in the first place, THEN the condition would be invalid because it’s impossible to grant an interest in something you don’t own.
What happens when a conditional gift is made, but the condition is not met? Let’s say, to extend our above example, Bob’s house is never transferred to Mark’s unconditional trust. Even though Mark fulfilled his condition by running a marathon, he would not receive the $5,000 from Aunt Patty. Bob’s now estranged relationship with his son Mark would continue. On the other hand, let’s say Mark fulfilled the condition, but the gift was lost in the shuffle during probate proceedings to Michael, King Bob’s nephew. Here, Mark could indeed sue King Bob’s estate for breach of condition (although, since King Bob never intended for Mark to get the money – but instead Michael – Mark’s chances of success are minimal). Which brings us to the next question: what if no-one knew King Bob had set up the conditional gift in the first place? That’s a different kettle of fish altogether. We will delve into that topic in our next blogpost.
The Importance of a Written Agreement
To even higher level Texas courts, signed written agreements are given presumptive value in cases over gifts. Recent examples are In the Estate of Blas: 92nd Judicial District, 2002, 6-02-00032-CV, Kinney v. Altman, 11th Court of Appeals, 9-1018, 11-11-00557-CV, and In re Estate of Davis, 13th Court of Appeals , 12-12-00182-CV. Texas Courts have found the following written documents to be valid gifting instruments to make a completed gift complete: Wills, Deeds, Affidavit of Heirship, Oil and Gas Leases, Oil and Gas Assignments, Oil and Gas Division Orders, Quitclaim Deeds, Warranty Deeds, Easement Agreements, and Oil and Gas Partnerships. Generally speaking, an informal document is not sufficient to constitute a gift.
Getting Legal Help and Starting an Action
There may be times when you are not able to successfully reclaim a gift through negotiation and where better advice is required or worse, where your claim requires the authority of the court to succeed. In such cases it may be necessary to seek the advice of a solicitor. Often such specialists will be solicitors who have experience in the area of law in question. Sometimes the people involved can agree a deal without needing to resort to the courts. However, sometimes in order to retrieve a gift, it is necessary for a legal proceeding to be raised. Some examples of legal proceedings relevant to reclaiming a gift include: An interdict prevents a specific action being taken by another party such as inappropriately disposing of property which has been promised as a gift. For example you may have donated a valuable object to an owner-occupied residence. If you believe the property is becoming under threat due to the circumstances of the occupant you can seek a specific remedy from the court. It may be appropriate to seek a legal undertaking from a recipient of a gift if you want a binding written agreement that a specific transaction is to take place. The process for reclaiming a gift through a court order is as follows: If you seek an order from the court to return a gift, then the burden is on you to provide evidence of the promise of a gift, your appreciation because of it and any other reasons why is yours. The court will consider any reasons given to support your claim as to why you should not return the gift. The court will not just make the order simply because you request it.
Cultural and Religious Considerations
The decision to take back a gift goes beyond legal implications – it may also touch upon social and moral perspectives. Societal norms and ethical principles might seem to dissuade anyone from attempting to claim back a gift, even if the law seems to say otherwise. In some cultures, the act of gifting is an honored exchange. For instance, in many Native American traditions, a gift holds a sacred place, becoming a part of the identity of the person to whom it is given. Breaking that exchange, such as by asking for the item back, is seen as an affront to those values. Similarly, a gift can represent a bond or commitment (such as in a marriage or romantic relationship) , and taking it back can damage those connections. The social implications are unmistakable.
This can be amplified if the gift has a strong connection to a pre-existing contract between the gifted and the recipient. A ring may represent a contract of marriage, for instance, and asking for the ring back after a divorce could trigger resentment and social disapproval.
Ethical considerations also play a large role in this area of law. Some lawyers, including University of Chicago Law School professor Don M. Herzog, argue that the law should not involve itself in this arena, as ethical concerns already establish the parameters for both donor and donee. If a recipient of a gift thinks that there may be a moral imperative for them to return something, they may wish to do so even in the absence of any threats of litigation by the donor.