As we all know, where the word 'deed' is involved we are no doubt dealing with something related to property and real estate. But while this may be the most popular context of this word, the deed is an important bit of documentation where transfer of a certain right is concerned. The right of ownership, or indeed its transfer, requires every bit of documentation which it can get, and hence deeds are more popularly seen and heard of in this context. Moving on to the issue about property, a deed is usually used to indicate that the seller is giving away his right of ownership over a property, to the buyer for certain consideration. But with the gift deed, you're going to have to scratch out the last bit.
Explaining a Gift Deed
If you have any inkling of knowledge about the Contract Law in most countries, you will know that contracts without any consideration (cash or kind) are considered null and void, save for a few exceptions. Let us take an example to explain this slightly complex sounding statement. When you want to get a new house, you go to a homeowner who no longer wants his and quote a price so that the homeowner should relinquish the ownership. So this 'consideration' from the point of view of the seller is the cash he gets, while the consideration from your point of view is the ownership of the home. Furthermore, the contract law in most countries doesn't recognize deals done without consideration for both parties and where there is only one benefactor.
Except in the case known as a 'gift'. When one person 'gifts' his large, plush and priceless property to another, he receives nothing in return by way of consideration or compensation. The receiver of this property pays nothing. The consideration here is said to be 'love' and hence the contracts stands fulfilled.
When you give your immovable asset to another person, which is, you grant your right of ownership over an immovable property to another, for no consideration, or in other words 'for free', the gift deed is the piece of documentation which records that. The deed shows that the buyer has received the property for no consideration, as a gift and its ownership for all practical purposes, rests with him.
The Format
The deed is a legal document which means that it needs to follow a certain format and can be contested in the court of law. Being a legal document there are a few things to be kept in mind when drafting it.
The deed is drafted by the person giving the property as a gift or the donor. It speaks of his willingness to give that specified asset away, in return for no consideration and completely out of love and affection for the person receiving the gift or the donee. The donor's signature is often not enough and signatures of witnesses too are essential. While the number of witnesses may vary depending on the rules of the state, normally two witnesses are enough to seal the deal. The witnesses, of course, cannot be people who have material interest in the property themselves and as such need to be disinterested parties that stand to gain nothing from the contents of the deed. For example, the donee cannot pose as the witness as he directly acquires the ownership as a result of the deed. Lastly, it also contains the signature of the donee signifying his acceptance.
The gift deed is basically made when deals without consideration for immovable property are made as they serve the basic purpose of establishing the transfer of the right of ownership.
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