Somewhere in Texas, there is a fire burning merrily in the fireplace, the air is redolent with the smell of turkey roasting in the oven, the Christmas tree is brightly lit with gaily wrapped gifts heaped under the boughs, and holiday music is playing softly in the background. The family is gathered by the tree ready to open the presents.
The scene being thus set, all that remains is to add a backdrop of legal commentary, which I will happily supply.
Grandmother hands the first decorated bag to Susie and says it is for her. Susie rummages around and pulls out a doll. She thanks her grandmother.
Legal: This was a classic gift inter vivos. There was delivery of possession when grandmother, the donor, handed the bag containing a doll, the subject matter of the gift, to Susie, the donee. Grandmother intended to vest ownership of the doll in Susie unconditionally and immediately. Susie accepted the gift.
Grandmother hands a wrapped box to Billy, who rips off the paper, opens the box and sees footed pink pajamas with bunny ears. He tosses it back to his grandmother and says he does not want it.
Legal: The gift was incomplete because Billy, the donee, refused to accept it.
Grandmother, undeterred, hands a beautiful envelope to Penelope. Penelope tears open the envelope to find a card that reads her grandmother gives her the family diamond tiara. The tiara is in grandmother’s safety deposit box at the bank. Penelope hugs her grandmother and joyfully accepts.
Legal: The gift was incomplete because Grandmother did not give Penelope physical possession of the tiara.
Grandmother picks up a small box and hands it to her boyfriend. In it he finds an engagement ring with a note asking him to marry her. He accepts her proposal. Merriment ensues. Later, while grandmother and boyfriend are cleaning up the kitchen, they fight over who should dry the dishes. The boyfriend tells Grandmother the engagement is off.
Legal: The gift of an engagement ring was, absent a binding written agreement between the parties, covered by the conditional-gift rule. The rule contains an element of fault. The ring must be returned to the donor, Grandmother, because the donee, her boyfriend, was at fault in terminating the engagement.
Grandmother tells Jimmy his gift is in his stocking hanging from the mantle. Jimmy grabs the stocking and pulls out a $10,000 Certificate of Deposit that has two names on it: Jimmy and Grandmother. Jimmy jumps for joy.
Legal: When Grandmother added Jimmy’s name to the CD, Grandmother still retained ownership in the Certificate of Deposit as payee. She did not divest herself absolutely and irrevocably of her ownership in the CD. She retained the right to exchange the CD for cash at any time. Jimmy’s possession of the certificate paper did not confer ownership upon him because a CD is intangible personal property. The gift was not completed.
While everyone is preparing to leave, Grandmother pulls Polly into the living room. She whispers she has something special to give her, and then hands her a $50,000 check made out in Polly’s name. Polly is so elated that she grabs the check and runs yelling from the room, thus missing the sight of Grandmother tripping over an ottoman and falling to her death.
Legal: The gift of the check was revoked ipso facto by the death of grandmother, the donor. The possibility of payment was legally thwarted.
A gift is merely a legal transaction wrapped up with a bow.
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Virginia Hammerle is in her fourth decade of practicing law. She is Board Certified in Civil Trial by the Texas Board of Legal Specialization and an Accredited Estate Planner. Contact her at firstname.lastname@example.org or visit www.hammerle.com. This column does not constitute legal advice.