Gift Deed

Though it is not compulsory to execute a gift deed while gifting any asset, they are useful for making the gift-giver’s intentions clear to those who believe they have a claim to the property at hand. It acts as evidence of the transfer, potentially reducing the number of misunderstandings as to who owns the property. A gift includes any tangible property that can be transferred.

Gift deeds are useful for making the gift-giver’s intentions clear to those who believe they have a claim to the property at hand. The gift deed is evidence of a transfer. A gift deed also provides a resolution for any misunderstandings as to who owns the property. This is because once the gift deed is exceecuted, an irrevocable transfer is made to the recipient. Thus, a gift deed holds the purpose of creating a valid and documented record of the gifting of a good or property. A gift deed may also be evidence of the legal transfer of ownership of the good or property from one party to another.

Does the type of Property in the Gift Deed Matter?

The type of property being gifted can create additional requirements for a legally-recognised transfer by a living donor to occur. A key distinction is between real property (or ‘realty’) and personal property. Realty includes land and interests in land, such as fixtures or easements. However, any other type of property is generally classified as personal property.

Real Property

For real property, it is important to consider its subcategories of Torrens title land and old system (or ‘general law’) land. For Torrens title land, the registered owner of the property must have the transfer recorded on the Torrens Register. Landholders must also present the relevant certificate of title to their local land titles office for an effective transfer unless they are from the Northern Territory or Queensland. As for old system land, it is only the deed itself which is of concern. For the deed to be valid, an indication of intention to sign the document as a deed must be clear. It must also have an appropriate attestation, by a witness to the signing of the deed for example.

Personal Property

Regarding personal property, the gift deed may be ineffective. This is if the gift-giver has not done everything necessary on their part to transfer ownership. This means that if the intended recipient requires further help from the gift-giver to complete the transfer, it will not be legally enforceable.

Example

Mark signs a gift deed stating he will transfer 100 of his company shares to Sarah. However, he does not lodge an instrument of transfer with the company, which is essential to complete the transaction. As only Mark can submit this instrument, and Sarah cannot, Mark has not done everything necessary on his part to transfer ownership. As such, Sarah does not become the legally-recognised owner of the shares.

Using Trusts to Transfer Property

An alternative method for gifting property is through the establishment of a trust. A trust exists when one party (the ‘trustee’) holds property for the benefit of another (the ‘beneficiary’).

Trusts have a range of advantages and disadvantages. For example, businesses and individuals can use them for tax benefits. However, establishing and maintaining a trust can be a complex process. Such factors are important to consider when deciding whether a trust is appropriate for your personal circumstances.

Use this Gift Deed if:

• You want to create a valid and documented record of the movement of goods or property. 
• You wish to legally transfer ownership from one party to another. 

What does this Gift Deed Cover?

• Records the gift of goods or property
• Follows terms and conditions such as ensuring the property has no existing claims
• Description of goods or property being transferred
• Transfers ownership and responsibility of the property