Gift Inter Vivos

Gift Inter Vivos Property Transfer Donor Donee Legal Transfer Estate Planning Conveyance Taxation
A gift inter vivos refers to the transfer of property from a donor to a donee during the donor's lifetime, made without any consideration or compensation. The donor thereby relinquishes all control or ownership over the gifted property.
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Definition

A gift inter vivos is a legal term referring to a gift of property that is given by one living person (the donor) to another (the donee) without any requirement for consideration or compensation. This transfer effectively means that the donor irrevocably gives up ownership, control, and all rights to the property, which becomes the sole possession of the donee.

Examples

  1. Monetary Gift: A parent transfers a sum of money to their adult child’s bank account without expecting any repayment.
  2. Real Estate Transfer: An individual signs over the deed of a piece of real estate to a friend or family member without receiving any monetary compensation.
  3. Valuable Asset Transfer: A person gifts a car to a sibling out of goodwill, without any form of payment being involved.
  4. Digital Assets: Transferring ownership of valuable digital assets, like cryptocurrency, without expecting a return.

FAQs About Gift Inter Vivos

1. What is required for a gift inter vivos to be legally binding?

  • For a gift inter vivos to be legally binding, the donor must have a clear intention to give the gift, the gift must be delivered to the donee, and the donee must accept the gift.

2. Can a gift inter vivos be revoked?

  • Generally, no. Once the gift has been completed—meaning the donor has delivered the gift and the donee has accepted it— the gift cannot be revoked.

3. Are there tax implications for gift inter vivos?

  • Yes, there can be significant tax implications. The donor may be subject to gift tax depending on the value of the gift and the jurisdiction’s tax laws. It is important to consult with a tax professional.

4. How does a gift inter vivos differ from a bequest?

  • A gift inter vivos is given during the donor’s lifetime, whereas a bequest is a gift given through a will, effective upon the donor’s death.

5. What types of property can be given as a gift inter vivos?

  • Almost any type of property can be given as a gift inter vivos, including real estate, personal property, money, and other financial assets.
  • Donee: The individual or entity receiving a gift.
  • Donor: The individual or entity giving a gift.
  • Gift Causa Mortis: A gift of personal property made in contemplation of imminent death, which is revocable if the donor survives.
  • Estate Tax: A tax on the transfer of the estate of a deceased person.
  • Grantor: Another term for the donor, especially used in the context of trust and estate law.

Online References

Suggested Books for Further Studies

  • “Wills, Trusts, and Estates” by Jesse Dukeminier and Robert H. Sitkoff
  • “The Complete Guide to Planning Your Estate in Texas” by Linda C. Ashar and Dean Hanewinckel
  • “Fundamentals of Modern Property Law” by Edward H. Rabin, Roberta Rosenthal Kwall, and Jeffrey L. Kwall
  • “Federal Income Taxation of Estates, Trusts, and Beneficiaries” by Richard B. Stephens and Guy B. Maxfield

Fundamentals of Gift Inter Vivos: Estate Planning Basics Quiz

### Does a gift inter vivos require the delivery and acceptance of the gift? - [x] Yes, both delivery and acceptance are necessary. - [ ] No, only the intention of the donor is required. - [ ] Only delivery is necessary, acceptance is optional. - [ ] Only acceptance is necessary, delivery is optional. > **Explanation:** For a gift inter vivos to be legally binding, the donor must clearly indicate the intention to give the gift, the gift must be delivered, and the donee must accept the gift. ### Can a legally completed gift inter vivos be revoked by the donor? - [ ] Yes, at any time without conditions. - [ ] Only if the donee agrees. - [x] No, once it is completed it cannot be revoked. - [ ] Yes, but only within a year. > **Explanation:** A legally completed gift inter vivos cannot be revoked by the donor as all ownership rights have been transferred to the donee. ### What tax implications might arise from giving a gift inter vivos above the annual exclusion limit? - [x] The donor may be liable for gift taxes. - [ ] The donee may have to pay income tax on the gift. - [ ] There are generally no tax implications. - [ ] The gift would be subject to an estate tax. > **Explanation:** The donor may have to file a gift tax return and potentially owe gift taxes if the value of the gift exceeds the annual exclusion limit set by tax authorities. ### In legal terms, who is the recipient of a gift inter vivos? - [ ] Grantor - [ ] Testator - [x] Donee - [ ] Executor > **Explanation:** The recipient of a gift inter vivos is referred to as the donee. ### What distinguishes a gift inter vivos from a gift causa mortis? - [ ] A gift inter vivos is revocable, whereas a gift causa mortis is not. - [ ] A gift inter vivos can only involve monetary assets. - [x] A gift inter vivos is made during the donor's lifetime without contemplation of imminent death. - [ ] A gift causa mortis applies solely to real estate. > **Explanation:** A gift inter vivos is made during the donor's lifetime without contemplation of imminent death, while a gift causa mortis is made in contemplation of imminent death. ### Which element is not essential for a valid gift inter vivos? - [ ] Donor’s intention - [x] Consideration or compensation - [ ] Delivery - [ ] Acceptance > **Explanation:** Consideration or compensation is not essential for a valid gift inter vivos as it is given without expectation of repayment. ### If a person transfers a property deed as a gift, what must be clearly demonstrated by the donor? - [ ] The property's future value - [x] Clear intention to give the property - [ ] The property's tax implications - [ ] That the property has no liens > **Explanation:** The donor must clearly demonstrate the intention to give the property as a gift. ### What is one major consequence of transferring a gift inter vivos? - [ ] The donor retains some control over the property. - [x] The donor loses all control and ownership over the property. - [ ] The donor can ask for the gift to be returned any time. - [ ] The donee can decide not to accept the gift at any time. > **Explanation:** Upon transferring a gift inter vivos, the donor loses all control and ownership over the property. ### What is an appropriate form of consideration for a gift inter vivos? - [x] No consideration is required or given. - [ ] A token payment of $1 - [ ] An informal promise - [ ] An exchange of goods or services > **Explanation:** No consideration is required or given in a gift inter vivos, which is made without any form of payment or exchange. ### Who must file a gift tax return if the gift's value exceeds the annual exclusion? - [ ] The donee - [ ] The executor of the donor’s estate - [x] The donor - [ ] The local municipality > **Explanation:** The donor must file a gift tax return if the value of the gift exceeds the annual exclusion limit.

Thank you for diving into the intricate world of property transfers and understanding the nuances of a gift inter vivos. Keep exploring and learning!

Wednesday, August 7, 2024
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