The term “gift inter vivos” refers to a gift of personal property made during the donor’s lifetime. In Uganda, receiving a gift or donation can be a blessing, but without proper documentation, it may turn into a legal nightmare. If a donor passes away or becomes mentally incapacitated, you could struggle to prove ownership of what was given to you. On the other hand, disputes may arise when someone falsely claims that your loved one gifted them property, leading to lengthy and costly legal battles.
Gifts and donations can range from personal money, land, and vehicles, personal items to business shares and other valuable assets. Regardless of the type, securing proper legal documentation is crucial to ensure that your ownership is recognized and protected under the law. Without this, you may find yourself entangled in disputes that could drain your time, finances, and emotional well-being.
What does the law say
At common law, the essential requisites of a valid gift are; capacity of donor, intention of donor to make gift, absence of consideration, completed delivery to or for donee, and acceptance of gift by donee. The donor of the gift must have had a present intent to make a gift of the property to the done and a transfer of the gift must be delivered to the donee and the donee must accept the gift in order for the property transfer to take place.
To avoid complications, here are key steps to legally secure gifts and donations and ensure proper estate planning:
1. Always Document the Gift in Writing
While verbal agreements may be common, they hold little legal weight in estate disputes. To avoid uncertainty, ensure that any significant gift, whether cash, land, or other assets, is documented in writing. This can take the form of:
- A Gift Deed, a legal document that specifies the details of the gift, the donor, and the recipient.
- A Signed and Witnessed Agreement stating the nature of the gift and confirming voluntary transfer.
- Bank or Mobile Money Transfer Records showing evidence of financial gifts which have a provision for the sender clearly stating the reason for the funds as a gift.
2. Register Land and High-Value Assets
If someone gifts you land, a house, or a vehicle, take immediate steps to register the asset in your name. For land, ensure that the title is transferred and registered under your name with the Uganda Land Registry. Failure to do so may lead to family disputes after the donor’s death.
3. Use Witnesses for Large or Significant Gifts
Having a witness present when receiving a gift can serve as extra proof. This is particularly important for oral gifts. A trusted family member, lawyer, or notary public can serve as a witness to confirm the authenticity of the transaction.
4. Obtain a Notarized Statement from the Donor
For added legal protection, a notarized statement can be useful. This is a written confirmation, signed by the donor and notarized by a lawyer or commissioner of oaths, affirming that they willingly gifted you the asset.
5. Keep Financial and Legal Records Safe
Secure all documentation in a safe place, such as:
- A personal safe or lockbox.
- A digital backup on a secure cloud service.
- A trusted legal or financial institution, such as an estate planning company.
6. Encourage Loved Ones to Include Gifts in Their Will
If you have received a significant gift from someone, encourage them to include it in their will to avoid disputes. A will explicitly stating who receives what reduces the chances of contestation in the future.
7. Consider a Trust for Ongoing Gifts
For donors who wish to transfer assets over time, setting up a trust can be a more structured approach. Trusts help in legally defining how assets should be managed and distributed, providing an additional layer of security.
8. Act Quickly to Address Ownership Transfers
Delays in formalizing ownership transfers increase the risk of disputes. If a donor promises to gift you an asset, ensure that all necessary legal steps are completed while they are still alive and mentally competent.
A well-documented gift ensures that you, as a recipient, can enjoy it without future disputes or legal uncertainties. It also prevents fraudulent claims against the estate of a deceased or incapacitated donor. By practicing proper estate planning habits, you safeguard not just your financial security but also family harmony.
Contact an estate planning professional today to learn how you can legally protect your gifts and financial legacy. This avails you with expert guidance on estate planning, trust funds, and securing assets for future generations.
Disclaimer: This blog post is for informational purposes only and does not constitute financial or legal advice. Always consult with a qualified professional for personalized guidance.
