A Gift Deed is a legal document that confers ownership of the property from the person giving called ‘donor’ to the person receiving called ‘donee’, freely and gratuitously like a gift without anything in return, out of love and affection. It becomes effective while the person making the transfer is in existence.

The gift deed requires registration as per the Indian Registration Act, 1908, and the people giving and receiving shall be present during the registration. A gift deed is given under Section 122 of Transfer of Property Act 1882. It says that a gift deed is the transfer of an existing moveable or immoveable property and made voluntarily, without consideration by a person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.

A gift deed includes transfer of both immovable and movable properties. Immovable properties can be lands, houses, apartments, etc. whereas movable properties can be jewelry, vehicles, cash, etc.

Some legal requirements and essentials for a gift deed are:

·      The property to be transfer should be in existence at the time of transfer as future inheritances are not expected.

·      The transfer shall be transfer fully voluntarily excluding any external influence.

·      The person giving the property (donor) must be legal owner of the property gifting. He must be in his capacity to make the deed both mentally and legally.

·      The person receiving (donee) must accept the property during the existence of the donor to keep it legal.

·      The deed should be printed on stamp paper for legality.

·      Registration of the deed is necessary to make it legally enforceable otherwise non-registration would lead to legal disputes. 

HOW THE SUPREME COURT INTERPRETED GIFTS MADE TO MINORS?

K. Balakrishnan v. K. Kamalam, was a case that dealt with acceptance of gift deed by a minor. The case involved legality of a gift deed executed by a mother in favor of her minor children and further the revocation of the gift. Later, the donor revoked the deed and cancelled the gift-deed after which she executed a will bequeathing the same property in favour of her daughter, the first respondent. The donor then died. The appellant then filed a suit claiming declaration of his titled to the suit property on the basis of the gift-deed and cancellation deed and will are ineffective and void in law.

The trial court and High court both rejected the suit. The core issue involved in this case was whether the appellant, who was minor on the date of execution of the gift-deed, can be held to have legally accepted the property in suit gifted to him. The Supreme court held the gift to the minor to be valid stating that the minors retain the capability to accept non-onerous gifts and that the silence or conduct of the minor and guardian can imply acceptance.            

WHAT IS A WILL?

A Will is a legal document in which a person (the testator) makes a statement of his intention regarding the transfer of his property or estate after his death. It also names the person (executor) who will take care of the property until it is transferred to the person having the right to receive.

While the public generally assumes a will is only for realty (such as land or buildings) and a testament for personal property (such as money or possessions), the terms are interrelated. A will today is acceptable for both real and personal property. It can also make a testamentary trust that does not come into existence until after the testator dies.

According to Section 2(h) of the Indian Succession Act, 1925, a will is defined as a legal expression of the testator's intention in respect of his property after death. According to Section 59, any individual who is not a minor and is of sound mind can create a will to dispose of lawfully his property.

Essentials of a will includes that it should be written, signed by the testator, and attested by at least two witnesses to be legally valid. It ensures the transfer of properties in a manner, reducing disputes among heirs.

·      The testator must be of legal age.

·      The testator must be of sound mind and must know that he is drafting a valid will and that it will have consequences.

·      A person has the intent to form a valid will if he or she intends to make a revocable transfer of property in the event of death at the moment of signing.

·      A valid will must be made voluntarily without any external control.

·      Appropriate property disposal among family and friends is required.

·      A valid will must be signed, dated, and attested by minimum 2 witnesses signed in order valid.

Types of Wills

1.      Privileged will - made by soldiers, airmen, and sailors when in actual service, allowing them some relaxations in formalities.

2.      Conditional will- specific type of will that becomes effective only if a certain condition or set of conditions is met.

3.      Mutual will - these are made by two people, such as spouses, where one or more parties agree to dispose of their property in a certain way.

JUDICIAL INTERPRETATION

Naresh Charan Das Gupta v. Paresh Charan Das Gupta, a landmark case of Supreme court where a dispute emerged between two brothers, Naresh Charan Das Gupta (the appellant) and Paresh Charan Das Gupta (the respondent), about the probate of a will made by their father, Bhabesh Charan Das Gupta. The main issue was whether the will was valid, and whether the will was executed under an undue influence exerted by the respondent. The petitioner, Naresh, contented the validity of his father's will, alleging that it was executed under undue influence by his elder brother, Paresh. The High Court had initially upheld the will's validity, leading Naresh to appeal to the Supreme Court. The Supreme Court affirmed the High Court's decision, ruling in favour of Paresh Charan Das Gupta. The Court reasoned that once a will is proven to have been executed with due solemnity by a person of competent understanding and as a free agent, the onus shifts to the party alleging undue influence to substantiate their claims. The apex court took interpretation of Section 61 of the Indian Succession Act that neglects any will or part of a will derived from fraud, coercion, or importunity that undermines the testator's freedom.

If you’re planning to transfer property, it’s crucial to understand the difference between a Gift Deed and a Will. You can also download ready-to-use formats from our Legal Templates Library.

DIFFERENCE BETWEEN GIFT DEED AND WILL

The difference between a gift deed and a will is with respect to timing and character of transfer of ownership in property. A gift deed is a transfer in which title is transferred quickly to the donee upon execution, registration, and acceptance, whereas that of a will involves a testamentary distribution, which is effective only after the death of the testator. Gift deeds are irrevocable, whereas wills are revocable and may be changed at any time prior to death. In a gift deed, the donee automatically takes ownership, even if the donor has reserved some rights of enjoyment, whereas in a will, the testator persists to have full control and possession until death. Both differ in formalities as well - a gift deed needs to be written, signed, witnessed and registered with stamp duty, whereas a will is required to be written, signed, attested by witnesses, and registration (optional).

When people consider passing on the property, one of the first questions they may ask is: Should I utilize gift deed or will? Both instruments are for transfer property, but they are different in terms of timing, ownership rights, revocability and legal formalities.

A gift deed is a the better option if a property owner wants to transfer ownership rights immediately in favour of the recipient. A gift deed transfers property while the donor is living and creates quick ownership with a lower possibility of occurring of any conflict. However, once a gift deed is executed, the donor loses all his control over the property, and the transaction is considered final and unchangeable.

If anyone desires to maintain ownership and control over property during their life, with the purpose of transferring property at death, a will is an appropriate option. A will comes in effect after the death of the testator, meaning the recipient, or beneficiary, must wait for the completion of the succession process. A will is a flexible option as the testator can or may revoke or modify the will at any time before death.

CONCLUSION

A gift deed is best for immediate transfer of property, and a will transfers ownership after the death and is best in case of future planning.

Example:

·      Suppose Mr. Arya is the owner of a house and has some savings. He wants his son Priyansh to inherit the house and his daughter Pranjal to get his savings after he dies. So, for this, he creates a ‘will’ stating this clearly. After Mr. Arya’s death, the will ensures that Priyansh and Pranjal receive the property exactly as he wished.

·      Difference between Gift deed and Will –

Ø Mr. Verma wants to give his car to his nephew immediately, so he makes a ‘gift deed’. His nephew gets full ownership right away. Now Verma here loses possession of his car and this is irreversible.

Ø Now the same Mr. Verma wants his house to go to his children after he dies, so he includes it in his ‘will’. The children will inherit the house only after his death and not before.

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