Gift Deeds by Senior Citizens in India

A gift deed acts as a legal document for transfer of ownership of a property from one individual to another as a gift, without the involvement of any compensation. Property transfers by way of gifts are irrevocable in nature after the completion of execution, unless it is hit by factors such as coercion, fraud or misrepresentation. A gift deed may be revoked by taking consent of both the parties.

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However, with the passage of time, it is noticed that the provisions related to gift deeds executed by senior citizens and their unchangeable nature has proved to be imprudent to their interests.

It has been observed that gift deeds are often executed by senior citizens in favour of their caretakers or children with the intention of ensuring that they will be provided with the basic amenities. However, they neglected by the transferee once the property or land is transferred upon registration of the gift deed.

Transfer of Immovable Property through Gift Deed

A transfer of immovable property out of affection can be done through gift deed, which is a transferred without any consideration. For a gift deed formed in relation to immovable property to remain valid, it is vital that it is registered along with two attesting witnesses.

NOTE: In case of movable property, registration of a gift deed is not necessary.

Irrevocable Nature

As per Indian laws, transfer of property by way of gifts are irrevocable or unchangeable and after the execution is complete, the same cannot be cancelled.

The Donor cannot rescind such transfer of property once it has been accepted by the Donee. However, if both the parties decide mutually that the gift shall revoked upon the happening of an event, it shall be deemed as a valid revocation.

Moreover, the law on voidable contracts, is also applicable to gift deeds. If any gift deed is obtained by any of the vitiating factors such coercion, fraud or misrepresentation then it will be voidable at the instance of the Donor.

Transfer through Will vs. Gift Deed

Although the transfer of property through Will is effective only upon the death of the testator, gift deeds become effective upon registration itself.

Furthermore, property transfer through a Will is a bulky and time-consuming process because the process of probate is to be initiated through courts, after which the property is transferred in case of no disputes.

However, after the execution or registration of a gift deed it becomes difficult to challenge unless there exist any factors such as coercion, fraud, etc. The possibility of objections during the execution of a Will is usually high as it results in disputes amongst the heirs.

Gift Deed Overriding Over Will

Once a gift deed is executed and registered properly then it shall override the stipulations contained qua the said property in a Will, since it terminates to be a part of the Testator’s estate and therefore cannot be distributed through the Will.

Moreover, although it is not necessary to register a Will, the possibility of having multiple Wills cannot be ruled out.  Transfer of property by a gift deed is a more definitive mode of transfer with limited challenges thereafter.

Maintenance and Welfare of Parents and Senior Citizens Act, 2007

Many senior citizens have opted for the transfer of property through a gift deed, as opposed to a Will since it is less cumbersome and is effective during their lifetime itself.

However, the purpose behind making transfers by senior citizens to their dear ones has proved to be a challenge in the current times. On one hand, transfers made through Wills go through a tedious legal process and remain ambiguous, while on the other hand, gift deeds, given their irrevocable nature, can often put the Donor through insecurity of whether they will be taken care of after the  transfer of property completes.

To overcome the gap of misuse of gift deeds by transferees, Maintenance and Welfare of Parents and Senior Citizens Act, 2007 aids in the cancellation and revocation of such gift deeds at the behest of Senior Citizens that were subject to the condition of providing basic necessities and maintenance.

Who Can Seek Revocation?

The revocation of Gift deed is possible by any senior citizen above 60 years of age, who has transferred their property by way of giff and can take help from the court to declare it as void. However, it is only possible, if such transfer was subjected to provide basic amenities and meet the basic physical needs of the Donor, but the transferee fails to do so.

However, the benefit of this provisions can only be obtained by those people who have executed such gift deeds after 2007, i.e., after the enforcement of the Maintenance and Welfare of Parents and Senior Citizens Act, 2007.

The Act is a great relief to senior citizens who are ill-treated by family members and refuse to provide basic amenities to the senior citizens after obtaining a gift deed in their favour.

Stipulation on Maintenance Mandatory

Recently, the Supreme Court has settled the issue whether the condition for providing basic amenities must necessarily be stipulated in the gift deed itself and has declared that as per the scheme, only those transfers can be deemed void which were made in regard to providing basic amenities and meeting basic needs to the concerned person concerned, and therefore the existence of such clause for maintenance in the gift deed is crucial.

It is essential that the gift deed by senior citizens is drafted carefully, since it can only be considered void if it precisely contains a stipulation that the transferee must maintain, otherwise it shall remain to be valid.

How to Seek Revocation?

An individual may go to the special forum formed for the purposes that is, Maintenance Tribunal and can file an application for gift deed’s revocation. Each state has separate rules under which an aggrieved person may approach the authority.

Conclusion

In Indian, Gift Deeds executed by senior citizens pose several legal hindrances and requires welfare of senior citizens protection and care due to its irrevocable nature. As an option of immediate transfer is provided by Gift Deed as against Wills, a risk of negligence and misuse lingers in the hearts of senior citizens who have transferred their property. Understanding the nature of Gift Deeds is essential to navigate any challenges associated with it.