What Is a Gift Deed?
A gift deed is a legal document that voluntarily and without compensation transfers ownership of real estate (as well as other types of property) from one person to another. It is commonly used by people to add their spouses onto the title of their properties or to transfer ownership to children. It is also a good way to avoid paying taxes on inheritance.
In order to draft a gift deed, you must include the names of both the donor and the donee, as well as a description of the property. You should also list the property’s value and any other terms or conditions that have been agreed upon by both parties. Finally, you should sign and add the details of two witnesses who will attest to the deed’s authenticity.
Once you have completed your gift deed, it is time to have it stamped and registered. This process varies from state to state, so be sure to check with your local government for specifics. The stamp duty and registration charges will depend on the property’s value.
A property gift deed is an effective legal document that can help prevent disputes over money or possessions after a person dies. It is a legal record that changes ownership of the property, and it can also protect the asset from creditors and other claimants.
However, the document must be drafted properly in order to be valid. In addition, the donor must be of sound mind and not forced into signing it. It is best to obtain a doctor’s certificate to ensure this. The document should also be kept with the Will of the Donor, in case it is challenged by family members or creditors.
In some cases, a Gift Deed can be used to protect assets from bankruptcy or lawsuits. This is because the donor does not have to pay taxes on gifts given to his or her immediate family members, such as siblings, parents, and spouses. However, you should always consult with a tax professional before completing this type of transaction to make sure that it is the right choice for your situation.
When you gift a property, you must register it in the county clerk’s office and change the name on the deed and tax records. You should also inform your insurance company about the change. If you give the property to a trust, NGO, or charity centre, you may not be required to pay any stamp duty. However, it is important to note that some State regulations bar NGOs from accepting gifts of property. You should also make sure that the registrar department is aware of the transaction, as they may require you to pay the appropriate fees. In addition, a registrar will also need to be informed of any other conditions associated with the transaction. This includes the Donor’s revocation clause and any restrictions on how the property can be used or sold. It is also important to get a copy of the document notarized and certified.
