Six Things to Know Before Drafting a Gift Deed

A gift deed is a notarised document used while transferring a movable or immovable property from one person to another. The person who gifts a property is called the donor and the one who receives becomes the donee.

You should be careful about certain things before drafting your gift deed. Here are six important points.

1. Competence to Contract

A person who is competent to contract, according to government rules, can gift his or her property to the desired person. Only a competent person can be a donor. A minor, for instance, is an incompetent person. But this doesn’t make a minor ineligible to be a donee. A minor can receive a property as a gift, which will be collected by his or her natural guardian. The guardian can act as a manager of the property and can avail limited access to it, until the minor comes of age.

2. Legitimacy of Acceptance

The gift of property by a donor will be legitimate only upon the complete acceptance of a donee. In the case of minors who are donees, neither the donor nor the guardian can force the minor to accept the gift. If the gift is burdensome to the minor, he or she can put the gift on hold and accept or refuse it once they are of a legal age. Refusal will automatically invalidate the gift deed.

3. No Benefits From the Gift

A gift must be given by the donor without any element of consideration. A donor must not draft the deed based on certain prerequisites, especially monetary. If there is any detection of benefits for the donor concerning the gift, then it ceases to be a gift.

4. Gifting Process

The primary structure of this process involves a reciprocal act of offering and accepting the gift. The exchange is considered valid only after acceptance of the gift. The donee must accept it in his or her lifetime.

5. Accepting the Gift

The acceptance of the donor’s gift by the donee cinches the deed. Acceptance of the gift becomes valid once the donee takes the gift into his or her possession. Delivery of the gift reaffirms validity.

6. Property Registration

Since you’re gifting an immovable property, you can do so only if the property is registered. The registered documents must have the appropriate non-judicial stamp and be registered under the registration act, along with the attestation of two witnesses.

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