Also known as: donation inter vivos · donationes inter vivos · inter vivos gift · inter vivos donation
Written by attorneys — see sources below.
An irrevocable transfer of property made during the donor's lifetime to a living donee without consideration. The transfer must be completed with delivery and acceptance to take effect immediately rather than at death.
Evelyn executed a will devising her downtown building to grandson Leo. Two years later she deeded Leo a suburban duplex and handed him a letter stating the gift reduced his share under the will. Leo signed the letter acknowledging receipt. After Evelyn died the residuary beneficiaries asserted that the duplex satisfied the downtown-building devise in part.
A taxpayer received funds from a trust distribution and argued the transfer constituted a completed donatio inter vivos rather than taxable income. The court examined whether the donor had relinquished all dominion during life and whether the recipient had accepted the property outright.
In June 1958, the American Brewery, Inc., in cooperation with Maryland state game officials, placed a tagged rock fish named Diamond Jim III into the Chesapeake Bay as part of its Third Annual American Beer Fishing Derby. The contest rules provided that the person who caught Diamond Jim III and presented the identification tag along with an affidavit confirming capture by hook and line would receive a $25,000 cash prize. The brewery also placed other tagged fish carrying smaller prizes in the bay. On the morning of August 6, 1958, William Simmons caught Diamond Jim III while fishing in the Chesapeake Bay. Although Simmons was aware of the fishing derby, he had not set out specifically to catch the prize fish. After realizing the significance of the tag, Simmons complied with the contest requirements and, during a television appearance arranged by the brewery, received the $25,000 prize. The Internal Revenue Service determined that the prize constituted taxable gross income and assessed a deficiency of $5,230 against Simmons. Simmons paid the tax and filed a claim for refund. After receiving a partial refund based on deductions, Simmons brought suit in the United States District Court for the District of Maryland seeking a full refund of the tax paid on the prize. In the district court, Simmons contended that the prize was not includible in gross income or, alternatively, that it qualified for exclusion under section 74(b) for prizes and awards or section 102 for gifts, and that taxing it would violate the Constitution. The district court granted summary judgment in favor of the Government. Simmons then appealed to the United States Court of Appeals for the Fourth Circuit.
View caseA debtor transferred assets to a family member shortly before filing. The trustee contended the transfer was a donatio inter vivos that removed property from the estate. The court assessed whether delivery occurred while both parties were alive and whether the transfer lacked any retained interest by the donor.
Vickie Lynn Marshall married J. Howard Marshall II, Pierce Marshall’s father, approximately one year before J. Howard’s death. Shortly before J. Howard died, Vickie filed suit against Pierce in Texas state probate court asserting that Pierce had tortiously interfered with a gift J. Howard intended to provide her through a trust. After J. Howard’s death, Vickie filed a petition for bankruptcy in the United States Bankruptcy Court for the Central District of California. Pierce filed a proof of claim in the bankruptcy proceeding asserting a defamation claim against Vickie’s estate arising from statements made to the press by Vickie’s lawyers accusing him of fraud in controlling his father’s assets. Vickie responded by filing a counterclaim for tortious interference with the expected gift from J. Howard. On November 5, 1999, the Bankruptcy Court granted Vickie summary judgment on Pierce’s defamation claim. After a bench trial, on September 27, 2000, the Bankruptcy Court entered judgment for Vickie on her counterclaim and later awarded her over $400 million in compensatory damages and $25 million in punitive damages. The District Court concluded that Vickie’s counterclaim was not a core proceeding under 28 U.S.C. §157(b)(2)(C) and therefore treated the Bankruptcy Court’s judgment as proposed findings of fact and conclusions of law. The District Court conducted an independent review of the record. It declined to give preclusive effect to a Texas state court judgment that had been entered in Pierce’s favor. The District Court awarded Vickie compensatory and punitive damages, each in the amount of $44,292,767.33. The Court of Appeals for the Ninth Circuit reversed. It held that the Bankruptcy Court lacked authority to enter final judgment on Vickie’s counterclaim because the counterclaim was not so closely related to Pierce’s proof of claim that its resolution was necessary to resolve the allowance or disallowance of that claim. This holding made the Texas probate court judgment the earliest final judgment, which the Court of Appeals held the District Court should have afforded preclusive effect. The Supreme Court granted certiorari.
View caseA contemporaneous writing by the testator stating that the gift reduces the devise or a written acknowledgment by the devisee that the gift operates in satisfaction satisfies the requirement. The writing must be made at the time of the transfer.
Supporting sources
Both require a writing showing the transfer should be taken into account at death. An advancement applies only when the recipient is an heir at the decedent's death and reduces the intestate share. Satisfaction applies to a devise under a will.
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The signature alone does not create the gift. Delivery of the property and the donor's intent to transfer ownership immediately must also be present. The writing merely supplies evidence that the gift counts against a later devise or share.
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…required the bankruptcy court to determine whether Texas recognized a cause of action for tortious interference with an inter vivos gift—something the Supreme Court of Texas had yet to do). As in Northern Pipeline , the new courts in core proceedings “issue final judgments, which are binding and enforceable even in the…