As a probate litigator, it is not uncommon for me to come across clients who claim that family members wrongfully received property from a loved one prior to their passing. This “gift” often contravenes provisions founds within a decedent’s Last Will and Testament. An example would be a son finding his way onto mom’s bank account despite mom’s Will leaving everything to daughter. Does brother have a right to keep the claimed gift?
The essential elements for a valid gift are (a) present donative intent; (b) delivery; and (c) acceptance. The requirement that the donor possess present intent to make a gift is of the utmost importance. Intent cannot be based on a contemplated future event, or the desire that the gift not be complete until after passing. Present intent also will not exist where the donor lacks mental capacity or is being unduly influenced. Careful consideration must always be paid to these factors. For there to be a valid gift, there must also be an irrevocable surrender of the property. Stated another way, there must be an immediate interested given to the donee. Joint bank accounts may be created through constructive or symbolic delivery. Dominion and control can be shared as compared to a total surrender by the donor. Finally, and least often in controversy, is the requirement that the intended recipient actually accept the gift. This is rarely at issue as acceptance is presumed and rarely does a donee seek to reject property.
When an asset is registered or titled jointly there is a strong presumption of joint ownership. Furthermore, when a joint account is established with funds contributed by one person, there is a strong presumption that a gift was made. Once evidence sufficient to establish the presumption of a gift has been presented, the party seeking to invalidate the gift must overcome the presumption by “clear and convincing” evidence which is a high evidentiary standard.
Applying these rules to the hypothetical first referenced, a presumption will exist that mom indented to gift the contents of her bank account to son since she added his name to the title. Daughter can contest the “gift,” but will be tasked with proving, by clear and convincing evidence, that mom did not “intend” to create a gift by placing son on the account. This battle is not always easy and is often decided based on the ability to introduce strong, contradictory evidence.
The best way to prevent litigation of contested gifts is to develop a clear estate plan with an attorney, and to ensure it is updated regularly. Communication with family is also important as gift litigation is often predicated on a lack of understanding between family members as to what a desired planned or otherwise desired. Please do not hesitate to contact our firm if you desire to receive further information regarding the laws of gifting.