Imperfect and Invalid Gifts

Setting Aside a Gift

The presumption is that gifts may not be revoked once given.  A gift may be revocable by its terms.

Gifts may be set aside if induced by fraud, mistake or misrepresentation or undue influence.  There are many cases in Ireland over the years where gifts have been set aside when made by older, vulnerable persons in favour of persons in a position of authority and influence over them.  Gifts by duress, force or overbearing will of the donor are patently are void.

A gift may be set aside on the basis of misrepresentation.  Even where the misrepresentation is innocent, the donor has a right in equity to recover the gift.  Imperfect knowledge of the donor of the effect of the instrument making the gift may suffice to set it aside.

Pre-Insolvency / Avoiding Creditors

Gifts which made within certain periods of bankruptcy may be set aside automatically depending on the terms of the gift.  Different time limits apply depending on the category of persons to whom the gift is made.

A fraudulent conveyance may be set aside at any time by anyone thereby prejudiced.  This is a voluntary disposition of land or indeed a non-voluntary disposition made with the intent to defraud creditors.  Involuntary disposition made with the intent to defraud a later purchaser is voidable at the instance of the later purchaser.  A voluntary disposition whether made is deemed to be made with the intent to defraud is not so deemed because it is made subsequently for valuable consideration.

Unlawful Purposes

A gift for an illegal purpose may in itself be an offence.  For example, bribing a public official or a judicial officer will constitute a serious crime.

Gifts to persons to influence in relation to voting and use of powers generally may constitute corruption or fraud.

Incomplete Gift

The general principle is that a court will not fulfil an uncompleted gift.  An intending donor is not compelled to complete or perfect transfer of title.  A gift is only valid if the donor has done everything according to the nature of the property concerned to transfer the title to the asset to the donee.

An incomplete gift may be revoked at any time.  The courts of equity do not intervene.  It is said that equity does not aid a volunteer.

A voluntary equitable assignment of a chose in action must be complete and perfected.  Notice to the debtor or fund holder is not necessary to make the gift complete as between the assignor and assignee.

Completing an Apparently Incomplete Gift

There is a distinction between a declaration of trust and an intended gift.  In the case of a declaration of trust, there is an intention to constitute the maker, declarant as trustee.  However words of an intention to deliver property.

If there has been consideration for a promise such as where the promisee has spent money or incurred an obligation on faith of the promise, the obligation to transfer the property may arise.

The later acts of the donor may create an obligation to complete an incomplete gift.  If the donor gives the donee possession of the lands and tell him, saying that he may build a house on it.  The donee if he then acts to his detriment in so doing, may call on the donor or even or his personal representatives to complete the gift under the principles of estoppel.

An incomplete gift may be perfected by the donor appointing the donee as his executor or one of them.  It is a principal that where a testator expresses an intention of making a gift of property to a person who he names hs personal representative, then if the intention remained unchanged, the representative is entitled to hold it for his benefit.

The donor’s intention must not be an intention to benefit by will.  Otherwise, the gift must be by way of a valid will.