A deed of gift is a legal document confirming voluntary transfer of a property (or share of a property) for no consideration, therefore, the person gifting the property (the donor) receives nothing in return such as money from the recipient of the gift (the donee). Furthermore, when gifting 100% of a property, the donor loses all rights to the property, which may not always be in their best interests.
In order to be able to gift something outright, the donor has to own it outright first, therefore, any charges registered with Land Registry may affect the legality of the gift. A property cannot be gifted if there is a mortgage outstanding.
These are just a few reasons why legal advice, correct preparation and execution of the gift are very important and often crucial, especially when considering gifting your home.
“I just want to gift my house! Why do I need to pay for legal advice?”
Understandably, many people believe that gifting their homes should be a simple transaction and that they do not need legal advice or formal paperwork. However, many people also gift their properties with the intention of transferring the legal title only and keep the entitlement to reside there, which may be difficult given the definition of gift.
If this is the case, maybe a deed of gift is not the best option and may cause more issues than benefits.
As previously mentioned, outright gifting of a property deprives the donor of any legal rights and control over the property. The new owner can make decisions in relation to the property, which can include selling, gifting or renting out the property. Therefore, careful consideration of the intentions is necessary when people are about to make such a life affecting decision.
“I am gifting my property to my children, they would never make me homeless!”
We understand that most people would make such gifts only to their trusted ones. However, this cannot guarantee that their wishes would be met. Even if the recipient’s intentions are for the donor to remain in the property, sometimes other events, such as loan defaults, bankruptcy or even care home fees in the name of the new owner, may cause the donor to become homeless.
Gifting a property involves many aspects that require evaluation, seeking legal advice beforehand is likely to avoid any unwanted outcomes and negative implications in the future.
We understand the difficulty of taking the right action. To ensure that you are making an informed decision with our deed of gift services we offer a detailed advice appointment followed up with an advice letter to ensure that you understand the implications as well as information about other options that can help achieve your initial goal in the most beneficial way. We would then give you the opportunity to change your mind after you have received the advice and to either proceed with a different service or not to proceed at all.
If you are considering gifting your property, we would be happy to discuss your options and provide you with a free quote on 0161 696 6238 or complete our online enquiry form and a member of the team will contact you to discuss your requirements.
By Vasilka Yovcheva from our Wills & Probate team
Comments