In our daily lives, there have been many occasions when we have given someone a gift or received one ourselves. At first glance, it seems like a very simple transaction, but in reality, behind this seemingly simple act lies a rather complex set of legal issues that must be considered in order to avoid practical problems related to a gift agreement.
What is a Gift Agreement?
A gift agreement is an arrangement under which one person (the donor) transfers property or a right to another person (the donee) free of charge.
The key feature of a gift agreement is its gratuitous nature — the donor transfers property to the donee without receiving any payment in return.
Parties to a Gift Agreement
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Donor – the person who transfers property to the donee free of charge.
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Donee – the person who receives the gifted property.
Both the donor and the donee may be natural persons or legal entities.
What Can Be the Subject of a Gift Agreement?
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Immovable property – an apartment, a land plot.
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Movable property – a car, valuables, as well as money.
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Rights – for example, the transfer of copyright or assignment of a claim.
Mandatory Form of a Gift Agreement
In most cases, a gift agreement can be concluded orally (at the moment the property is transferred), and this form is acceptable only when the subject is movable property. However, this does not mean that you cannot put a gift agreement for movable property in writing. On the contrary, a written form is preferable and more effective in preventing future problems.
A gift agreement for movable property gains legal force when the donor actually transfers the property to the donee, and the latter accepts it.
As for immovable property, its transfer always requires a written agreement notarized by a notary, followed by registration of ownership rights in the Public Registry (Real Estate Registry). A gift agreement for immovable property is considered concluded and legally valid only once the property has been registered in the Public Registry.
When Can a Gift Agreement Be Revoked?
Although a gift is transferred “free of charge,” there are legal grounds that allow the donor to revoke a gift agreement.
According to Article 595 of the Civil Code of Georgia, a gift may be revoked in the following cases:
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A gift may be revoked if the donee causes serious insult or shows significant ingratitude toward the donor or their close relatives. If the gift is revoked, the donor may reclaim the gifted property. It must also be noted that a gift may only be revoked within one year after the donor becomes aware of the circumstances giving rise to this right.
Practical Example – When Can Gifted Property Be Reclaimed?
Apart from revocation based on immoral actions by the donee, the law also provides cases when the donor may reclaim the gifted property without any fault on the part of the donee.
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If, after making the gift, the donor finds themselves in a difficult financial situation and is unable to support themselves or their dependents, they have the right to demand the return of the gifted property, provided it still exists and reclaiming it does not place the donee in a difficult position.
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Gifted property cannot be reclaimed if the donor has deliberately or through gross negligence placed themselves in such a difficult situation.
Thus, there are three preconditions for reclaiming a gifted item:
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The donor must be in a severe condition where they cannot support themselves or their dependents.
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The gifted property must still exist and be in the possession of the donee.
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Reclaiming the property must not place the donee in a difficult situation.
It is also important to note that if the donor has deliberately or through gross negligence brought themselves into a difficult situation, they lose the right to reclaim the property.
A gift agreement may seem like a simple transaction at first glance, but it is important to understand that its subject may involve immovable property, a car, or a large sum of money. Therefore, consulting with a lawyer before entering into such an agreement is crucial to avoid potential future legal problems.