The Gift That Keeps on Giving (With the Right Paperwork)

The festive season is a time for generosity, and for some, that means more than the usual socks or scented candles. If you’re considering giving a significant gift like property or financial support to loved ones this Christmas, it’s worth ensuring your generosity is legally sound.

Gifting property isn’t as simple as handing over the keys with a cheerful “Merry Christmas.” When gifting property, a deed of gift or formal agreement is necessary. Any transfer of ownership needs to be formally recorded, with the property Title updated to reflect the change. Even financial gifts benefit from proper documentation, such as a deed of gift, which is a clear written record stating that the asset is a gift, not a loan. While these may seem like small formalities, they can save future complications.

There are also practical implications to consider. While New Zealand doesn’t have gift duties, financial gifts or income-generating assets (like a rental property or shares) may bring tax obligations for the recipient. Gifting can also affect your estate planning, particularly if your Will doesn’t reflect the changes.

If the recipient is in a relationship, the gift could unintentionally become subject to relationship property claims unless properly structured.  To avoid this, it’s important to ensure the gift is clearly outlined in a formal document, that explicitly states the asset is intended to be separate from any relationship property. You may also want to consider using a trust structure to protect the asset from future relationship property claims, which can provide greater security for both the giver and the recipient.

To avoid potential headaches, seek advice from an experienced lawyer who can guide you through the process, draft the necessary documents, and update your Will to align with your intentions. Discussing your plans with family is also a good idea to ensure everyone is on the same page.

Gifting property or financial assets can be a wonderful way to spread joy and support loved ones, but it’s worth taking the time to do it right. After all, the best gifts are the ones that come with no strings (or legal surprises) attached.

How can we help?

If you need help with gifting or life planning, WRMK Lawyers’ friendly team of experienced local life planning lawyers are happy to help.

Our thanks to Allie Budge for writing this article which was first published in the Kaipara Lifestyler in December 2024.