A gift deed is a formal written legal document which gives legal ownership in property from one person to another person. Since the transfer of ownership is based upon a gift, there is no money, or consideration (something of value) exchanged for the transaction.
A gift deed is formally drafted, reviewed and executed by the person who is giving the gift deed property. This person is known as the “donor.” The donor’s signature must be witnessed by at least two disinterested individuals and must fulfill the specific legal requirements of the particular jurisdiction. So long as the legal requirements are fulfilled, the signed gift deed establishes the legal relationship of the donor and the recipient, as well as the legal status of the property.
Sometimes, legal issues emerge in connection with the use of a gift deed. For example, if property is owned as a joint tenancy with right of survivorship by two persons, one owner of the property could execute a gift deed and then terminate the right of survivorship in the property. This could present significant legal problems relating to the survivorship matter. There may also be issues with Gift Deed Tax.
If you are contemplating the use of a gift deed, it is important to consult with an experienced attorney. An attorney can not just assist you in evaluating your particular gifting goals, but also the attorney can help you review your overall estate plan to make sure that you are considering the most beneficial options available.