Also known as: donative transfer · gratuitous transfers
Written by attorneys · grounded in primary & secondary sources — see below
A gratuitous conveyance of property interests effected without consideration, such as by gift, will, or inter vivos trust. The classification determines whether the transfer is subject to formalities required for donative dispositions and how choice-of-law rules evaluate the parties' expectations in multistate settings.
Derek Douglas, domiciled in State A, executes a deed gifting coastal property located in State B to his niece Destiny Davis. After Derek's death, a dispute arises over whether State A or State B law governs the validity of the transfer. The court applies the most significant relationship test, weighing the parties' justified expectations formed during the donative transaction against the situs state's interest in regulating interests in its land.
Dwight Dorsey creates a revocable inter vivos trust funded with most of his assets and names a friend as beneficiary. After Dwight's death, his surviving spouse challenges the arrangement as an invalid attempt to defeat her elective share. The court determines whether the trust qualifies as a completed donative transfer or remains subject to the spouse's statutory rights in the estate.
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A third-party gift or inheritance to one spouse remains that spouse's individual property even when used in a jointly operated business. Marital funds or labor invested in the asset may create a marital claim only to the incremental value added, leaving the original gifted interest classified as individual.
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A restraint is enforceable if, under all circumstances, it reasonably serves the donor's purpose without unduly impairing alienability. A narrow perpetual bar on private sales that preserves dedicated public use can satisfy the test when balanced against marketability concerns.
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Protection of the transferor's justified expectations carries considerable importance because parties typically consult counsel and anticipate specific legal consequences. Certainty and predictability of result therefore weigh heavily when evaluating the state of most significant relationship.
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…legal authority for this proposition, and it is contrary to property law principles. See Restatement (Third) of Prop.: Wills & Donative Transfers § 24.2 (2011) (stating that a fee simple is "never followed by a future interest"). While it is true that a fee simple is descendible or devisable, that does not mean that it also…