When a person wants to transfer real property to another person not listed on the original deed, one option in Texas for that type of transaction is a gift deed, which could take the form of either a special warranty deed or a general warranty deed. As its title indicates, the gift deed transfers ownership of property as a gift; the person providing the gift, the grantor, expects nothing in return for the transfer. The property is a free gift with no strings attached. While the transfer of property may seem simple, proper documentation of a gift deed is critical to ensure the transfer is enforceable.
Requirements of a Gift Deed
According to Texas Property Code § 5.021, a deed must be in writing, it must be signed by the grantor, it must include a legal description of the property, and it must be delivered, at which point the title immediately passes from the grantor to the grantee.
In order to be valid, the gift deed must state the following:
Consideration in a Gift Deed
Determining the validity of a gift deed rests most strongly on the intent of the parties. Since the gift deed is a voluntary transfer of real property to another, usually its stated consideration is “love of, and affection for, the grantee.” If the gift deed clearly and explicitly states that the property is given to the grantee and no other party questions that gift, the property passes to the grantee as soon as the deed is delivered.
Timing of the Conveyance
At times, validity of a gift deed has been denied based on the grantor’s timing for conveying property. For example, a property owner and the person with whom she was living, hand-wrote a will indicating that the property was to be “evenly owned” by the decedent’s grandchildren. The court determined that the document did not qualify as a gift deed. Because it was labeled as a will, it lacked donative intent, one of the key components of a gift deed. In addition, the transfer of property was not immediate but was instead incumbent upon the deaths of the owner and co-habitant. As a result, the attempted transfer was voided by the court.
In a contrasting case, the court determined that a mother’s transfer of property to her daughter did qualify as a gift deed. Although the gift deed did not explicitly state that it would transfer property immediately upon delivery of the gift deed, there was no evidence that the property did not convey immediately. The homestead and life estate rights of the mother’s husband were a matter of law and did not void the gift deed.
Although templates for gift deeds are available on-line, a competent real estate lawyer will ensure that the gift deed is the best option for a client and draft an enforceable and professional deed.
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