Q: ’Tis the Season. I just got a wonderful gift from my boyfriend, but I plan on breaking up with him shortly. Can I keep the gift?
A: You may be the lucky recipient of a true gift. A gift results from the voluntary transfer of something of value without payment by the recipient. To be a valid gift, the giver must intend that the item be transferred to and owned by the recipient, accompanied by actual transfer and acceptance of the gift by the recipient.
If the gift is not accepted, it’s not effective. That is why people are generally barred from dumping unwanted items on land with environmental problems and other items on unwilling donees.
Acceptance generally requires knowledge of the gift by the recipient. If the gift is secretive and unknown to the recipient, it will generally be considered as incomplete. Acceptance is usually evidenced by the recipient acknowledging the gift or otherwise exercising control over the gifted item.
Since a gift must be voluntary, when the donor is incompetent or suffers from undue influence, the gift can be challenged. Undue influence generally arises from a close or confidential relationship between a donor and the recipient. If this type of relationship exists, the recipient must generally introduce some evidence that the gift was valid.
If the gift is procured by fraud, it may also be set aside. This basis to challenging a gift is similar to undue influence.
Some gifts are revocable or cancelable. A gift made while the donor believes he or she is dying, is known as a gift causa mortis. A gift causa mortis is revocable at any time by the donor if the donor survives the pending threat to his or her life, if the donor outlives the recipient or if the donor dies with insufficient assets to pay the donor’s debts. However, if the recipient has paid money or otherwise incurred debt in reliance on the gift, equity may bar the donor from revoking the gift.
Engagement rings hold a unique place in the catalog of gifts. Since an engagement ring is given in contemplation of marriage, the donor is entitled to return of the ring if the engagement is terminated by the recipient or by mutual consent because the gift is not absolute. If the parties do marry, the ring generally remains the property of the recipient and is not considered a marital asset for division between the parties in event of divorce.
During divorce, it’s often important to determine if either party to the marriage has received any gifts from someone other than his or her spouse. Gifts between spouses are marital assets, subject to equitable division at time of divorce. Gifts from others generally remain property of the recipient. That means that well-intentioned parents may want to make a gift only to their child, as that gift will remain property of the child at time of divorce. A gift to the married couple will be owned by both of them.
A “gift” to avoid creditors is generally known as a fraudulent transfer. To the extent the gift is not exchanged for fair value, the gift can be set aside by a creditor of the donor.
In your case, the gift may be freely and voluntarily made by your boyfriend. It appears that you will accept the gift. Yet, if the gift was procured by fraud or by undue influence, you may find yourself fighting a claim for return.
The facts of any particular case will certainly affect the outcome. Before proceeding further, you may want to discuss your exact factual situation with an experienced attorney.
William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney. Questions for this column can be sent to William G. Morris, email: email@example.com, or by fax, (239) 642-0722.