What the service includes
A gift is often seen as a simple alternative to a will: you give, and that is the end of it. In practice a deed of gift is challenged just as often as a will: the donor’s lack of capacity, the transaction being a sham (a gift in place of a sale, to avoid the other owners’ pre-emption right), or a breach of other heirs’ rights.
We prepare deeds of gift so that they withstand challenge, for real estate, stakes in a business and other assets, including those with a foreign element. Where necessary, we also defend an existing deed of gift against unfounded claims by other heirs, or support a challenge to it where there are real grounds for one.
We also deal separately with gifts of a stake in a business. Here it is important to take into account not only the form of the transaction but also corporate restrictions: the other participants’ pre-emption right to buy the stake, and the need for the general meeting’s consent where the articles of association provide for it. Without these, a deed of gift risks being challenged not only by heirs but also by business partners.
What the service includes:
Who it is for
The situations clients most often bring to us on this topic.
How we work
A fixed fee and a clear plan of action, agreed before work begins. The timeframes below are indicative and depend on the complexity of the case.
Reviewing the situation
We establish what is being transferred and to whom, and whether there are other heirs or co-owners whose rights must be taken into account. Timeframe: 3-5 days.
Preparing the deed
We prepare the deed of gift to suit the specific asset: real estate, a stake in a company or other property. Timeframe: 1-2 weeks.
Notarisation
We support notarisation of the deed where the law requires it (a stake in an LLC, certain types of real estate). Timeframe: 1-3 days.
Registering the transfer of rights
We see the transaction through to the actual registration of the transfer of ownership to the donee. Timeframe: 2-4 weeks.
What you will need at the start
We confirm the exact list for your situation at the consultation. This is a guide so that you arrive at the first meeting prepared.
Key figures
Experience in this practice area specifically, not in practice as a whole.
Common mistakes
A gift used to disguise the sale of a stake and avoid pre-emption rights. The classic scheme of “gifting” a stake in an LLC to an outsider to get around the other participants’ right to buy is easily challenged as a sham transaction if this can be proved.
A gift without the spouse’s consent. If the asset was acquired during the marriage, a gift made without the spouse’s notarised consent creates a direct ground for later challenging the transaction.
A verbal agreement instead of a formal deed. A promise to give, without proper formalisation, has no legal consequences and leaves the donee without any protection.
What you get
A deed that withstands challenge. We take into account every ground on which the gift might be challenged already at the drafting stage.
A properly completed transfer of rights. Registration of the transfer of ownership is carried through to the end rather than left at the level of a verbal agreement.
Protection from other heirs’ claims. If someone tries to challenge a gift that has already been made, we defend its validity in court.
Clear tax consequences. The donor and the donee know in advance whether income tax arises and in what amount.
Related
Frequently asked questions
Can a gift be revoked if the donor changes their mind?+
As a general rule, no. A gift is irrevocable once it has been completed, except on a narrow list of grounds provided by law (for example, an attempt by the donee on the donor’s life) or expressly stated in the deed itself.
Can a gift be challenged as a sham transaction if it was in fact a sale?+
Yes, if it is proved that the parties actually intended a transaction for value (for example, a gift of a stake to get around the other participants’ pre-emption right to buy). Such a transaction is treated as a sham and can be challenged.
Is the spouse’s consent needed to give away property acquired during the marriage?+
Yes. Giving away jointly acquired property requires the spouse’s notarised consent, and without it the transaction can be challenged.
Is a gift taxable?+
Between close relatives, no. But for a gift between people who are not close relatives, the donee incurs income tax on the value of the gift (except for certain categories of property).
Can a deed of gift include a condition that the donor continues to use the property?+
Yes. For example, the donor’s right to live in the gifted flat for life can be expressly provided for in the deed. This is a common and lawful practice.
What happens to gifted property if the donee gets divorced?+
As a general rule, gifted property is the donee’s personal property and is not divided on divorce, unless a prenuptial agreement expressly provides otherwise.