A gift deed is a legal document written with love and affection as the only consideration. It is a legal document which transfers a property to another person as gift. Property transfered through a gift deed can be reported as a gift for federal tax purposes.
A gift deed can be used to donate items to an organization of the donor’s choice, such as a museum or a library. The donor in a gift deed can retain physical possession of the gift until it is transferred, or the donor becomes mentally incapacitated or deceased.
There are two types of gift deeds; revocable and irrevocable. With a revocable gift deed, the donor keeps the legal document until he or she decides to give the document to the donee or recipient of the gift. The donor can revoke the gift deed at any time. There is no legal obligation on the donor to provide the gift. With an irrevocable gift deed, the donee or recipient of the gift becomes its legal owner as soon as the donor physically delivers the gift deed document to him or her. In an irrevocable gift deed the donor can not revoke the gift offered. In both cases, the right to obtain physical delivery of the gift is postponed until the gift is actually given, or the donor becomes mentally incapacitated or deceased.