Difference between gift deed and settlement deed Gift deed and settlement deed are two legal documents that are used to transfer property or assets from one person to another. While both of these deeds are used for transfer of property, there are some key differences between them. 1. Definition: A gift deed is a legal document that is used to transfer ownership of property as a gift, without any consideration or payment. On the other hand, a settlement deed is a legal document that is used to transfer ownership of property as a settlement of a dispute or to provide for the financial security of a person. 2. Intention: The main intention behind a gift deed is to transfer property without any monetary exchange, typically out of love or goodwill. A settlement deed, on the other hand, is mainly used to resolve legal disputes or provide support to beneficiaries in times of financial need. 3. Consideration: In a gift deed, there is no consideration involved, meaning there is no requirement for payment or exchange. In contrast, a settlement deed may involve consideration in the form of the settlement of a dispute or monetary compensation for the transference of property. 4. Voluntaries: A gift deed is usually voluntary and is made out of the donor's free will. They are not obliged to transfer the property and do so willingly. However, a settlement deed may be made due to legal obligations or necessary arrangements as a result of a dispute or legal requirement. 5. Tax Implications: Gift deeds may be subject to taxation based on the gift tax laws in the respective jurisdiction. Settlement deeds, on the other hand, might not have immediate tax implications since they are typically made to settle disputes and resolve legal matters rather than as a gift. Types of Differences: 1. Absolute Gift Deed: This type of gift deed involves the transfer of property without any conditions or restrictions. The ownership of the property is irrevocably transferred to the recipient. 2. Conditional Gift Deed: In this type of gift deed, the transfer of property is subject to certain conditions or restrictions. The donor may impose specific conditions that need to be fulfilled by the recipient for the transfer to be effective. 3. Revocable Settlement Deed: A revocable settlement deed allows the donor to revoke or cancel the transfer of property at any time, if certain conditions are not met or if the donor changes their mind. 4. Irrevocable Settlement Deed: An irrevocable settlement deed ensures that the transfer of property is permanent and cannot be canceled or revoked by the donor. Once the deed is executed, the ownership of the property is transferred without any possibility of reversal. In conclusion, a gift deed is used to transfer property as a gift, without any consideration, while a settlement deed is used to settle legal disputes or provide financial security. Understanding the differences between these two types of deeds will help individuals make informed decisions regarding property transfers.
Difference Between Gift Deed And Settlement Deed
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The division of ancestral or inherited property between family members can be done by using a family settlement deed or gift settlement deed so that they can distribute the immovable asset among themselves. The gift settlement deed can be made with or without considerations among the family members or their dependents.
Those requirements include: An offer. This is what one party proposes to do, pay, etc. ... Acceptance. ... Valid consideration. ... Mutual assent. ... A legal purpose. ... A settlement agreement must also not be "unconscionable." This means that it cannot be illegal, fraudulent, or criminal.
Gift Deed is executed out of natural love and affection in favour of family members or loved ones whereas a deed of settlement is executed between larger family members or co-sharers to generally settle a dispute and demarcate or partition the assests. It can be prepared for both movable and immovable assets.
The document typically includes the following: The name of the parties involved. The settlement deed identifies the parties involved in the transaction, namely the seller and the buyer. ... Property details. ... Amount to be transacted. ... Terms and conditions. ... Signatures and witnesses. ... Heading. ... Parties Involved. ... Property Details.
Contents of a Family Settlement Agreement Parties to the FSA ? includes all the family members who are likely to be part of the dispute that has arisen or that may arise in the future. Particulars of Properties ? if the FSA aims to resolve property disputes, all the details of such properties should be mentioned.