Last Updated April 11, 2024
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What is a Gift Deed?
A Gift Deed, or a Deed of Gift, is a document you use to give property, assets, or money to another party without receiving monetary consideration in return. Instead, you give something out of love and affection.
The primary purpose of a Gift Deed is to legally establish and document your intention to give something as a gift. Gift Deeds work for both immediate and delayed gifts.
Gift Deeds are also known as:
- Deeds of Gift
- Gift Agreements
- Inter Vivos Gifts
Parties to a Gift Deed
The parties involved in a Gift Deed are as follows:
- The donor is the person giving the gift.
- The recipient (donee) is the person or charity receiving the gift.
- The agent is the person who will act on the donor’s behalf to ensure the recipient gets the gift.
Note: LawDepot's Gift Deed template requires donors to appoint an agent.
What gifts can you transfer with a Gift Deed?
Generally, you can use a Gift Deed for the following types of gifts:
- Real estate, such as residential or commercial properties or land
- Financial securities, such as shares or stocks in a business
- Personal property, such as vehicles, jewelry, art, furniture, or collectibles
- Money
Types of Gift Deeds
There are multiple types of Gift Deeds, each with distinct qualities. Our template only creates inter vivos Gift Deeds, meaning gifts are given during the donor’s life.
Our template can accommodate revocable and irrevocable Gift Deeds. As their names suggest, here’s how they differ:
- A revocable Gift Deed is one you can cancel in the future up until the gift is in the recipient’s possession.
- An irrevocable Gift Deed can't be canceled or withdrawn.
Besides the types noted above, a Gift Deed can also be causa mortis, meaning it comes into effect after the donor’s passing. Our template doesn’t support causa mortis deeds.
How do revocable Gift Deeds work?
In LawDepot's revocable Gift Deed, the agent gives the gift and deed to the recipient on the same date the donor signs the deed. Legal ownership of the gift also passes to the recipient on this day.
To give the gift at a later date, wait to sign your revocable Gift Deed until you are ready to give the gift.
The donor may revoke the gift at any time until they pass away or lose contractual capacity. Once they pass away, the agent will transfer the gifted property to the recipient as soon as possible.
How do irrevocable Gift Deeds work?
With LawDepot's irrevocable Gift Deed, the gift goes into a trust.
By delivering the irrevocable Gift Deed to the recipient, the donor transfers legal ownership to the recipient, even though the donor may continue to retain possession of the property. Once the donor gives the document to the recipient, the donor cannot change their mind and reclaim the gift.
When the donor passes away or loses contractual capacity, the agent delivers the gifted property to the recipient.
Common situations for using a Gift Deed
Here are three common purposes and situations where Gift Deeds are used:
1. Gifting to loved ones
Families commonly use Gift Deeds to transfer real estate or assets. For example, parents or grandparents may use a Gift Deed to gift a family cabin to their children or grandchildren. Or, a mother may give her daughter specific valuables, such as jewelry, and document it with a Gift Deed.
2. Donating to charity
Some individuals use Gift Deeds to donate property or assets to charitable organizations or nonprofits. This can have tax benefits for the donor, such as deductions for charitable contributions.
3. Estate planning
Gift Deeds can be part of an individual's estate planning strategy. By gifting assets during their lifetime, individuals can reduce the size of their taxable estate, potentially lowering estate taxes.
Gifting assets during one's lifetime can help reduce potential inheritance disputes among heirs since the donor's intentions are clear.
Unlike a Will, assets transferred through a Gift Deed avoid the probate process. This means the gifts pass directly to the recipient without court involvement, speeding up the transfer process.
How to make a Gift Deed
The easiest way to create a Gift Deed is by using a template. After specifying whether or not the Gift Deed can be revoked, you’ll have to provide the following information:
- A description of the gift, which should be as descriptive as possible and include any unique features or identifying information
- Donor and recipient details, including their full names, cities, and states
- First choice agent’s details, including their full names, cities, and states
- Alternate agent’s details, including their full names, cities, and states
Gift Deed versus Quitclaim Deed
Here are the main differences between a Gift Deed and a Quitclaim Deed:
| Gift Deed |
Quitclaim Deed |
| Transfers real estate, financial securities, personal property, or money |
Transfers real estate, financial securities, personal property, or money |
| Doesn’t involve monetary consideration |
Must involve monetary consideration, even if it’s $1.00 |
| Gift tax may apply |
Transfer tax may apply |
| Revocable or irrevocable |
Irrevocable (unless a court determines undue influence) |
Gift and Quitclaim Deeds don’t provide the recipient with any guarantee that the given property is outrightly owned by the owner.
Gift Deed versus Last Will
Here are the main differences between a Gift Deed and a Last Will and Testament:
| Gift Deed |
Last Will and Testament |
| Transfers ownership of assets during one’s lifetime (unless it’s causa mortis) |
Transfers ownership of assets after death |
| Doesn’t go through the probate process |
Must go through the probate process |
| Revocable or irrevocable during the creator’s lifetime |
Revocable during the creator’s lifetime |
One way Gift Deeds and Wills are similar is that they’re both irrevocable upon the creator’s death.
Is a Gift Deed legally binding?
Yes, a Gift Deed is a legally binding document if it’s properly signed and witnessed and it indicates the donor's intention to gift the property or asset without any exchange of money or valuable consideration.
Does a Gift Deed need to be witnessed and notarized?
Yes, you must sign your Gift Deed with two witnesses to ensure it’s enforceable. A witness must be a third party who isn’t benefitting in any way from the gift. For example, you should not use the gift recipient's spouse or children as witnesses.
A Gift Deed doesn’t need to be notarized for it to be legally binding. However, notarizing your Gift Deed can be an extra step that further validates your intention to give a gift.
Depending on local laws and the gift type, recording the Gift Deed with the appropriate government authority, such as the county recorder's office, may be necessary to provide public notice of the transfer.
Can a Gift Deed be canceled?
If a Gift Deed is revocable, then it can be canceled. If a Gift Deed is irrevocable, the donor cannot cancel it once they deliver the document to the recipient.
With LawDepot’s revocable Gift Deed template, we attach a Revocation of Inter Vivos Deed of Gift, which you can use whenever (and if ever) you need to revoke the gift.
