Gifts are given on many occasions – whether it is a birthday, Christmas or a wedding anniversary. The basic idea is first of all to give the presentee a pleasure. But legally speaking, that is not all. "From a legal perspective, making a gift is more than just a gesture of making someone happy," explains Constantin von Piechowski, lawyer from Hamburg. Lawyers define a gift as a donation by which someone enriches another person from his or her own assets. For it the involved ones must agree, so von Piechowski. However, such an agreement can also arise from the circumstances: If you hold your birthday gift beaming with joy in your hands, you have made your will clear without words. However, the reverse is also true: "This also means that you don’t have to accept a gift," says the lawyer. What you need to know about gifts.
When is a gift effective?
"In order for a gift to be legally effective, according to Section 518 (1) of the German Civil Code, a notary must formally certify the gift promise, i.e., the donor’s declaration of intent," says Wolfgang Muller, legal expert at Ideal Versicherung. In practice, however, this is only the case with larger gifts, such as when it comes to the transfer of real estate. For everyday gifts, it is also sufficient if the gift promise coincides with the gift performance. In concrete terms, this means that if the father gives his son the new smartphone with the words "The phone is now yours," the gift is effective. If he only promises the son, on the other hand, the gift is invalid – he may still change his mind.
Can you reclaim a gift?
If you want to give something away, you should think about it carefully. "The old adage: ‘A gift is a gift, to get it back is to steal it’ is basically true," explains corporate lawyer Muller. Nevertheless, there are circumstances under which a legally effective gift can be reversed. If a gift was tied to a specific purpose – for example, a grant to the adult child for vocational training – and it later turns out that this purpose was not fulfilled, you can demand your money back. The same applies to expensive gifts if the giver is later unable to support himself – in the event of impoverishment, the gift can be reclaimed up to ten years after the gift was made. And in the case of so-called "gross ingratitude", a reclaim is also possible.
Reclaim the gift: What is "gross ingratitude"?
A big reason for reclaiming a gift is gross ingratitude. "This exists if the donee has been guilty of serious misconduct or gross misconduct towards the donor or his relatives," explains Ideal expert Muller. So there must be a noticeable lack of gratitude. When exactly that is the case, however, is not clearly regulated in the law.
However, in the case of death threats, physical abuse, serious insults, groundless criminal charges and, in the case of spouses under special circumstances, infidelity, courts regularly assume gross ingratitude. In order to exercise the right of withdrawal, the donor must take action within one year of becoming aware of the misconduct. Important: If the misconduct was forgiven, a revocation is excluded.
Can gifts be tied to conditions?
In a gift contract conditions for a gift can be specified. In principle, the donor and the recipient are free in their decision. For example, it may be stipulated that the transfer of the family home by the parents to the children will be made only on condition that they will take care of it in old age. If they do not, the parents can reverse the gift and sell the house to finance a caregiver with the proceeds. Such a gift contract can also arise implicitly, for example if you give your daughter and husband a large sum to buy a house and the marriage is divorced a short time later. Then the donors can invoke a "discontinuation of the basis of the transaction," the Federal Court of Justice in Karlsruhe ruled last year (case number: X ZR 107/16).
In theory, this also applies to smaller gifts, such as a dog that parents give to their child on condition that the child walks the four-legged friend regularly. If the offspring does not comply, the parents could theoretically reclaim the dog. But of course no one does this – here theory and practice differ considerably.
Gift tax – what is it??
The gift tax is the counterpart to the inheritance tax and is generally due on all gifts. However, exemption limits apply, depending on the degree of relationship: Spouses can give each other gifts worth up to 500.000 euros. Children and stepchildren can inherit up to 400 euros.000 euros tax-free gift, the grandchildren up to 200000 euros. At 100.000 euros is the exemption limit for all other descendants. Non-relatives are allowed to give up to 20.000 euros tax-free gift. The exemption limits can be used up again every ten years – and they also count towards any inheritance.
Who of his father a house worth 400.000 euros as a gift cannot inherit another cent tax-free after his death one year later. However, if the father dies ten years after the gift, the daughter or son can inherit up to 400 euros.Inherit € 000 without paying inheritance tax. Wealthy families regularly take advantage of this rule to transfer assets to the next generation tax-free, step by step, by means of gifts.
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