Deed of donation, bequest

Deed of donation, bequest

One form of legal instrument for effecting the transfer of property from one person to another that may be intended to minimize, if not completely avoid, the payment of taxes is the Inter-Vivos Deed of Gift. It is usually applied as an instant way of transferring ownership, where the owner simply gives away his ownership to any legal entity, in many cases a son or daughter or any close relative, affiliate or business partner, without any form of monetary consideration, therefore not subject to any form of sales or income tax.

Although in principle a deed of donation is similar in effect to a will, i.e. giving away gratuitously to anyone possessing legal property, the main distinction being in the time of the instruments. The last will and testament of the property owner takes effect and becomes enforceable only after the death of the testator. A donation contract, on the other hand, can take effect immediately or at any time period the donor sees fit.

The transfer tax payable to the government in a deed of gift is minimal compared to the amount that can be assessed under a last will and testament, which may include, in addition to basic transfer tax, inheritance tax and any outstanding liabilities of the testator to be finally charged against his estate.

Although both instruments can be executed unilaterally, the deed of donation can become more legally irrevocable and no longer revocable when the consent and acceptance of the donee is expressly stated in the contract. Whereas everyone’s last will and testament is still subject to revision or change during the testator’s lifetime, as it becomes executory only after his death.

In any case, the legal jurisprudence is based on the principle that nothing is more final and enforceable than the last will and final instructions for the settlement of a dying person, therefore further strengthening the legal bond that seals the last will and testament.

#Deed #donation #bequest

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