Planning For A Secure Future

How to deal with incomplete transfers in California

On Behalf of | Nov 27, 2023 | Estate Administration & Probate, Estate Planning

There are only two ways to transfer property to a loved one in California: when still alive and after death. A gift deed is a popular option when transferring property while alive. However, to be valid, it must be “complete.” In other words, the transferor must relinquish all their rights to the property and not retain any control or benefit from it. If something unfortunate happens to the transferor before the recipient accepts the gift, then it becomes void or, in estate administration terminology, “incomplete.”

The fate of incomplete transfers in California

All incomplete gifts will go back to the transferor’s estate. As mentioned before, courts consider incomplete gifts void with no legal effect. In that case, the regular probate process will take priority over the intended gift. Consequently, the estate distributor will allocate the property in accordance with California’s intestacy laws, as it is likely that the deceased giver did not include it in their will. It is important to note, however, that there are exceptions to this rule.

Exceptions to the rule

If the transferor (giver) has a “donative promise” with someone unrelated by blood or marriage, then that person may have a right to claim the property even if it was an incomplete gift. Their only task would be to provide a written and signed statement by the giver that they intend to give away the asset in question.

If that does not apply to your situation, then you must present evidence to the court demonstrating the existence of the promise through actions or things you did in reliance on it. For example, if the giver promised to transfer their property to you in exchange for taking care of them in their old age, then you may have a valid claim to the property during estate administration.

It helps to avoid being in a situation where you have an incomplete gift. Therefore, if someone promises to transfer their property to you, request that they execute a deed or complete the transfer during their lifetime to avoid any confusion. However, if, unfortunately, you do end up in this situation, it’s important to understand the exceptions and take appropriate action to try and claim the property.