Gift-giving is an important aspect of life that helps to develop relationships with people. Although it serves as an avenue for demonstrating sincerity or goodwill, it can also be seen as a way of transferring ownership of property from one person to another.
Although some gifts can be transferred without going through any procedures, others require a legal document that shows the process of the transfer before the gift is handed over to the recipient (donee).
This document is a registrable instrument and it is known as the “Gift Deed.” It is seen as legal proof that shows that property was transferred from donor to donee without paying any compensation.
A deed of gift is made up of several vital elements that ensure the transfer of ownership is successful, and in this post, we will be looking at some of them. But, first, let’s understand the gift deed and its importance. Read our article on proof of land ownership in Nigeria
What is a Deed of Gift?
A gift deed agreement or “deed of gift” serves as a piece of evidence that shows the transfer of ownership of movable and immovable items, such as real estate properties, from one person to another—the donor to the donee.
In other words, it is a legal document required when someone voluntarily transfers a gift to a family member or friend, maybe during their birthday, wedding, anniversary party, etc. Also, it could be that you want to donate a gift to a non-profit organisation, this agreement will be required to serve as proof of ownership transfer.
This donation is always a voluntary act done without the expectation of compensation. Therefore, there is usually no financial transaction between the donor and the donee before there is a transfer of ownership.
Before receiving a gift through a deed of gift, it is necessary to discuss the legal implications and verify if the donor is the original owner of the property before acceptance.
Types of Deed of Gift
1. Revocable Deed of Gift
This is simply a type of deed that can be revoked at any time. Sometimes, donors will utilize this method to express their desire to make a gift in the future while reserving the right to back out at any time. As long as the gift is still in the recipient’s hands, the donor has the opportunity to revoke it.
2. Irrevocable Deed of Gift
This method of gift deed cannot be changed or revoked. It gives the receiver ownership of assets and real estate. This gift is first placed in a trust until the donor loses capacity or passes away. Then the designated agent/attorney in the gift deed plays the role of ensuring the gift is delivered to the intended beneficiary.
Elements of a Gift Deed
1. Names of the Donor and the Recipient
This is one of the most important elements in a gift deed document. It helps to identify and verify who the donor is and the recipient of the gift.
The donor and recipient’s full name, address, and relationship must be listed. However, if the giver is acting on behalf of someone else who owns the property, you need to include information about your relationship with that person or entity.
2. Donor’s Intent
To ascertain the legitimacy of the gift, it is essential to know the donor’s intent. The donor must state clearly that he/she is giving the property voluntarily out of love and is not being forced or threatened into doing so.
3. Property Rights of the Donee
This document has to state the recipient’s ownership rights. It has to indicate if the donor wants to keep any of the intellectual property rights.
However, both parties must agree on this term before the gift deed is signed. The donee needs to know if he/she can sell, lease, or rent the property following his or her wishes.
4. Property Details
For gifts like real estate properties, it is important to indicate every detail of the property—measurements, layout, and area.
This can help the donee know exactly what belongs to him and the value in case he intends to mortgage the property in the future. Also, knowing the details of the property can help prevent controversy in the future.
5. Witnesses
To ensure the transfer of ownership is valid, there have to be one or two people who can bear witness to the transfer. Therefore, the gift deed must include the names and addresses of the witnesses and must be signed by the witnesses for it to be legal.
6. Acceptance of the Deed of Gift
It is important to sign the Deed of Gift as soon as the recipient and the initial owner have discussed and agreed on its provisions. The gift deed should be signed and dated by both the donor and the donee’s representative.
Conclusion
A gift deed is usually made available after the beneficiary approves the transfer of ownership. To guarantee that the gift reaches the intended recipient, the donor would need an attorney or an agent who would ensure the beneficiary received the gift. This is crucial, especially if the donee is a minor. Get more insight into transfer of property ownership agreement in Nigeria.
