Property - Gifts

Question:

Of what legal value is an agreement whereby someone undertakes to transfer real estate into someone else’s name as a gift ? Can the real estate owner change his/her mind ?

Answer:

If transfer of title has not yet been made in the appropriate real estate register, then the principles of the Gift Law apply in such a situation. An agreement such as the one described above is, in essence, “ an undertaking to make a gift” .Under the act such an undertaking should be in writing. As long as the position of the intended recipient has not changed for the worse because he/she relied on the undertaking, the intended donor is free to withdraw his/her undertaking because of the former’s exceptionally bad behaviour towards him/her or his/her family, or because the financial situation of the donor has deteriorated markedly.

Relying on the above principles, Tel Aviv District Court rejected an appeal by a son against the family court’s refusal to enforce an agreement he had made with his father whereby the latter undertook to transfer the family apartment into the son’s name as a gift. The respondent had gone back on his undertaking, but rights in the property had not been transferred into the son’s name . Accordingly, he had been entitled to change his mind . The son had not proved that he had suffered by relying on the undertaking.

Furthermore, it was shown that a remark existed in the Lands Registry preventing the father from transferring rights in the apartment, which he had inherited in a will, into one of his children’s names – with or without payment.

Case:

I had a rich relative who gave me a roof-top sea-side apartment. I got married a few years ago and am now thinking of divorcing. The apartment is registered in my name only. Would my husband be entitled to part of this ?

Answer:

Property received as a gift is one of the exceptions to the rule under the 1973 Spouses’ Property Relations Act that property acquired during the course of a marriage is joint property to be balanced out between the sides upon divorce. Thus a husband whose wife was given an apartment would have no legal claim on it should they divorce and it would remain the wife’s exclusive property.

1. If some property that requires registration (eg an apartment or a car) is bought with the money and the property is registered in both spouses’ names then the new purchase will be regarded as jointly owned (as if the other spouse received his part as a gift).
2. If the gift money is used to buy furniture for the home this is likely to be regarded as joint property
3. If however, the wife buys a holiday home, for example, without any contribution from the husband, and registers it in her name only, then that will be regarded as being owned exclusively by her, as a continuation of the gift, and her husband will have no rights to it.

Question:

My husband gave me a wedding present of half of the apartment which his parents purchased for him during his youth. A short time ago I decided to divorce and when I told my husband of my plans he demanded I give back my half of the apartment. He explained that he gave me half of the apartment on condition that we marry and keep the family together. Can he deprive me of my rights to half of the apartment this way ?

Answer:

No ! In principle, a marital crisis cannot be used to turn the clock back and cancel a present given during the marriage, except in very specific circumstances where the gift was conditioned at the time .

The Supreme Court has summarized the situation regarding cancelling ‘conditonal’ gifts: ‘ Someone who wishes to condition a gift with a cessation condition, or someone who wishes to put an obligation alongside the gift which he gives, must do this in a clear and identifiable way. In the absence of evidence, there is no room to claim the existence of a condition and no condition can be created that does not derive from a principle at the time the gift was made. The assumption is that a present is final and watertight when made and the fact that hopes for the future fade, is not, by itself grounds for showing that the gift is cancelled.’

Question:

My husband received an apartment from a relative when she died and registered half of the rights in it in my name. We lived in it for a while but then , following an argument to protect his ‘ego’ my husband announced that he wanted to divorce and demanded that I give him back the share of the apartment that he gave me. I objected and he threatened to bring legal action to get back ‘his share’. What are his chances of succeeding ?

Answer:

Extremely slim. When a spouse acquires an apartment by way of gift or inheritance, or buys it with his own money, but chooses to register it in the joint names of both parties, there is an assumption that the couple intended to balance out their property equally .

Question:

Are there any restrictions upon transferring property rights to a relative if you are in debt ?

Answer:

Although the Bankruptcy Ordinance allows certain acts to be cancelled retrospectively in specific circumstances, the general rule is that if no legal restrictions have been put on a person’s control of his/her property, then the fact that he/she is in debt should not limit his/her freedom to do what he/she wants with it.

In December 2001 The Tel Aviv District Court rejected an appeal by a bank to cancel the transfer of the defendant’s half –share in a property to his daughter because he owed it money. The court said that if no ‘freezing order’ had been put on the property nor any trustee in bankruptcy been appointed, then a person was free to do as he wished with his property, even if he was in debt.

Question:

My father gave me money and an apartment. It looks as if he is going to be declared bankrupt. Are the gifts in danger ?

Answer:

Not necessarily as it depends upon when the gift was given in relation to when someone is declared bankrupt.

Under the Bankruptcy Ordinance , which applies to individuals, gifts made in the two years immediately preceding a declaration of bankruptcy are automatically cancelled.

Gifts given between 2-10 years prior to the declaration of bankruptcy may still be valid if the recipient manages to prove two cumulative conditions - (1) that the giver was financially solvent (without the gift) when he gave it and (2) that after the gift was made rights in the property were transferred to the recipient.

If more than 10 years have passed since the donor was declared bankrupt then the gift holds.

Question:

During our marriage I gave my wife several valuable gold Kruggerand necklaces. We are now negotiating for divorce. She claims that they are hers as they were a personal gift. I bought them as an investment but said she could wear them. Would the court regard them as marital property or just her property ?

Answer:

The answer is not clear cut. What determines whether presents given by one spouse to another during the course of their marriage count as marital property to be balanced out between them when they divorce, according to the 1973 Spouses’ Property Relations Law, or not , is the parties’ intention . This is to be learnt from their behaviour and from the particular circumstances.

Several possibilities exist regarding jewellery, even though at first sight it would seem an item intended for personal use, and therefore, unlikely to be regarded as marital property. For example, ‘collectors’ items’ such as Kruggerand coins made into jewellery could be bought as an investment in which case they could be argued as being joint property. However, if such an item is given to mark an occasion such as a birthday or anniversary it is more likely to be regarded as something belonging exclusively to the receiver, rather than being marital property.

Question:

I am currently negotiating for a divorce. My husband has been in the diamond business for many years and always gave me presents of gems which I would have made up into rings or earrings as the fancy took me. I have a large quantity of gems left. He now claims that all these are joint, marital property and not my own personal property. Is he right ?

Answer:

The whole issue of presents given during marriage, especially jewellery and precious items, is far from being clear cut. What determines whether presents given by one party to the other during the marriage are gifts is the intention of the parties. This is to be learnt from their behaviour and from the particular circumstances. Property regarded as marital property is to be balanced out between the parties, according to the 1973 Spouses’ Property Relations Law, whereas gifts given by one to the other remain personal property, are not to be balanced out between them.

Several possibilities exist regarding jewellery and precious items – these could have been intended to be given as a gift, as an investment or even part of business stock. What appears to be the case here is that the gems made up into items of jewelry according to the wife’s instructions would appear to be intended as gifts, in which case her husband would have no right to claim they were joint property. If they were made up for particular occasions like birthdays or wedding anniversaries, this would reinforce the argument that they were intended to be personal presents. Where someone buys a large quantity of gems or gold, or jewelry which is valuable due to its type or quantity , and succeeds in persuading the court that he did so for investment or business purposes, then the court can declare it to be joint property, to be shared between the parties. It does not matter if the other party is allowed to wear it or use it as the intention is what counts.

Question :

Some years ago I transferred savings I had from before my marriage into the joint account my husband and I hold. Recently we have had problems in our marriage. I have all the documentation relating to the transfer so that I can prove exactly how much was transferred, where from and when. Am I entitled to get what I transferred back ?

Answer:

Once money is transferred from an individual account owned by one spouse into a joint account held by the husband and wife it becomes mutual property -even its origin was property owned by only one party prior to the marriage. Both parties have equal rights to what is in the joint account.

The party who transferred the money may actually withdraw a sum equivalent to what he/she deposited from a personal account into a joint account, but this could be risky. A court could regard the money in the joint account as common property, and what was originally deposited in it as a present from the party depositing it from the moment it entered the account.

It is worth noting - as long as a party keeps money owned by him/her prior to the marriage in a separate account in his/her sole name it remains his/her personal property, and is not joint property acquired by mutual effort during the time the parties lived together as a married couple.