Gifts – No Take Back

Good news for everyone who gets a gift at Christmas (except possibly a recipient of the infamous ugly Christmas sweater) is that there is no “take back” of a completed gift. Even though that is the rule, Florida has seen much argument over what is generically known as gifts.

A gift is legally defined as a voluntary transfer from one person to another. No payment or other consideration is required to support a gift as would be required for contract. That can lead to an argument over whether a gift was intended or whether the transfer requires some payment or performance by the recipient. A gift is always revocable until it is completed. Those simple rules, on their face, evidence the opportunity for argument.

When is a gift complete? It is not complete when the donor announces intent. Delivery is required. Some courts explain delivery requires a complete giving up of dominion and control. Others have stated the recipient must accept the gift. The issue of acceptance is particularly important when the gift is something that the recipient may not want (i.e. land with environmental problems).

The issue of acceptance is generally raised by those who would benefit if the gift was not made. That is often the heirs of a decedent arguing that the decedent did not make a completed gift to someone during life. 

The donor must also have capacity. If a person is of unsound mind, a gift may be ineffective due to lack of mental capacity. If the donor does not understand what the donor is doing, the donor cannot appreciate the value or effect and a purported gift can be challenged. This is often the case where a caretaker or family member takes advantage of an elderly person of diminished capacity.

If the donor has capacity, the gift cannot be successfully challenged simply because it seems foolish or improvident.

When a gift is challenged, courts look closely at when a confidential relationship exists between donor and donee. The gifts in those cases are usually discovered after they are made and can be undone by the court. Challengers in those cases are benefited by the presumption of undue influence attached to such gifts. It falls on the donee to disprove undue influence and not on those challenging the gift.

Undue influence when one person exercises control over another by fraud, pressure or persuasion. The influence is so strong that the other person is deprived of free will. 

When the donor is of diminished mental capacity, it is easier for a donee to exert such pressure. These cases most often involve family members but can also involve caretakers and even friends.

It is not uncommon for a family gift to be made contingent on performance by the intended recipient. Promise of a reward if a minor does not ever smoke cigarettes or even a promise of a car if a grandchild graduates from high school with a certain grade point average are not unusual. But these gifts are not really gifts. They are more in the nature of contracts which the donor promises a benefit if the donee performs the contingency.

Delivery can be an issue. Delivery can be actual or constructive. When the donor keeps the entire gift, argument can ensue. The facts of each case will determine the outcome. 

Giving keys to a safe is likely as effective as delivering the safe. Gifting a cow may be accomplished even if the donor keeps the cow on the donor’s property because the donee does not have a place to store cattle. But, it must be clear that the gift was made. Statements and actions by the donor will be important as will be statements and actions by the donee.

Making a gift complete does not always require complying with legal requirements for transfer. An oral contract to transfer real estate is unenforceable. The statute of frauds requires contracts for sale of real estate to be in writing. Florida law requires a deed to be signed by the donor or along with two separate signing witnesses. 

But, there are numerous Florida cases upholding an oral gift of real property. In those cases, courts required evidence that the grantor orally confirmed intent to give real property that the donee relied on the donor’s words and took possession of the real property and that the donee made expensive changes and improvements to the property. The courts apply the doctrine of estoppel, which means it would be unjust to undo or revoke the gift because the donee relied upon the gift to change position and incurred substantial expense.

What about that gift from the store? You might think you can take it back, but that is strictly up to the store unless it is defective or broken. There is no legal right for the recipient to return or exchange a gift to the store from which it was purchased. Even the donor may have a problem returning an item not wanted or needed by the recipient.

Section 501.142 Florida Statutes governs returns in Florida and mandates that a retail establishment give a refund to the purchaser within 7 days of the date of purchase if the item is returned unused, in the original container and with proof of purchase. A retail establishment may exempt itself from that requirement by posting a sign stating no refunds at the point of sale.

Happy holidays everyone and happy gifting.