Advice for concluding a gift agreement: Why is it important to seek legal assistance from an attorney when concluding a gift agreement?

With a gift agreement, the donor undertakes to transfer ownership or another right to another person (the recipient) without consideration or to enrich the recipient in a different manner at the expense of their own assets, and the recipient declares their agreement to this.

Renunciation of a right is also considered a gift agreement if the obligor agrees to it.

A written gift agreement is usually concluded for an apartment, house, land, or high-value movable property (e.g., a personal vehicle, jewelry).

The donor must physically deliver the item or right to the recipient at the time of the contract so that the recipient can freely dispose of it. Otherwise, the gift agreement must be in written form. If the gift agreement is not in written form (oral gift promise), the recipient cannot demand its fulfillment through a lawsuit.

If you have any questions or need legal assistance in concluding a gift agreement, contact an attorney who will draft a draft gift agreement for you.

When to conclude a gift agreement?

It is advisable for the parties, with the legal assistance of an attorney, to first inquire and decide whether they truly wish to conclude only a gift agreement or whether they may have some other purpose in mind with the transaction (not just a gift), for example, whether they only want an uncompensated transfer of the donor's ownership right to the recipient or are entering into a contract as part of asset distribution in the event of death, whether it is necessary to consider the entitlements of potential forced heirs of the donor, whether there are any third-party claims for reimbursement of investments in the property, etc. All of these (and other) circumstances are important in choosing the appropriate type of contract, also because they may provide grounds for later asserting the invalidity of the gift agreement.

In this regard, the parties may determine, for example, that their true intention would be better expressed through a gift agreement for the event of death, a transfer agreement, a life annuity contract, a contract of support, etc.

If you are unsure which contract would be most suitable for your case, contact attorney Jurij Kutnjak, and he will advise you on drafting the most appropriate contract.

Conclusion of a gift agreement for real estate: Procedure, rights, and obligations

A gift agreement for an apartment, house, land, etc. (real estate) is a contract that must be concluded in writing and whose purpose is the uncompensated transfer of ownership rights to the recipient (gift purpose). The recipient does not acquire ownership rights simply by signing the contract but only through registration in the land register. Since land register registration requires land register consent (intabulation clause), it is advisable for the gift agreement itself to contain it, and if not, the parties should precisely specify the conditions under which the donor will issue the document with the land register consent to the recipient. Notarized certification of the donor's signature on the consent is necessary for registration in the land register.

If the land register indicates that the property is encumbered (e.g., with a mortgage, easements), the recipient acquires these encumbrances along with the ownership right. Before concluding a gift agreement, obtain a land register extract or authorize an attorney to do so and first ascertain the legal status of the real estate.

A certificate of land use designation is necessary for the registration of ownership rights in the land register. Obtain it before signing the gift agreement. A certificate is not required if the gift is an apartment or a specific part of a building.

In the case of a gift agreement involving agricultural land, approval of the legal transaction by the administrative unit is not required, but submission of a certificate from the administrative unit stating that approval is not required is necessary for signature verification.

Once you have collected all the necessary certificates, signed the contract, paid any applicable taxes, and notarized the donor's signature on the contract, the final step is registration in the land register.

If you don't want to waste time collecting certificates and documents or if you want legal assistance from an attorney in concluding a gift agreement, the procedure with the Tax Administration, and registration in the land register, contact attorney Jurij Kutnjak, who will collect the certificates for you and prepare the gift agreement.

Revocation of a gift agreement: Reasons and legal consequences

A gift agreement can be revoked for statutory reasons or reasons specified in the gift agreement.

According to the law, a gift agreement can be revoked for the following reasons:

• Revocation of a gift agreement due to hardship:

The donor can revoke a gift agreement if their livelihood is endangered after the agreement is concluded. Financial hardship must not only be threatened but must actually exist or be such that the donor does not have the means to support themselves or the persons they are legally obliged to support,

The recipient is obliged to return the received item or other gift to the donor. However, the recipient also has the option to retain the received gift in this case but must provide the donor with other means that enable their livelihood,

• Revocation of a gift agreement due to severe ingratitude:

If the recipient's behavior towards the donor or their close relatives is such that it would be morally unfair according to fundamental moral principles for the recipient to keep what they received.

This applies in cases where the recipient seriously mistreats the donor or their close relatives. Revocation for this reason is only applicable when the donor is a natural person and not when the donor is a legal entity.

In the case of revocation based on this reason, the right to revoke the gift agreement is inheritable. The contract can also be revoked against the recipient's heirs.

• Revocation of a gift agreement due to subsequently born children:

The donor can revoke a gift agreement if they have a child after the agreement is concluded and did not have any children previously.

The right to revoke cannot be waived, and any agreement waiving the right to revoke is void.

If you are unsure whether a particular gift agreement can be revoked and for what reasons, contact attorney Jurij Kutnjak, and he will provide advice tailored to your specific case.

Deadline for revocation of a gift agreement

The donor can revoke a gift within 1 year from the day they became aware of the reason for revocation.

If you want to revoke a gift agreement and are unsure whether there are grounds for revocation, contact attorney Jurij Kutnjak for legal advice and representation in the revocation process.

When is the annulment of a gift agreement possible?

A gift agreement may be invalid for various reasons. It could be that the parties intended to achieve an impermissible purpose with it (e.g., harming creditors, covertly depriving forced heirs), or it could be that the donor was legally incapacitated or even mentally incompetent at the time of entering into the gift agreement.

Certain circumstances or errors can be so significant that they render the gift agreement void (absolutely invalid), while others may be voidable, meaning they remain valid until a court declares them void.

In the event of a dispute, grounds for nullity or voidability must be asserted in a lawsuit.

If you are unsure whether a particular gift agreement is invalid and whether there are grounds for nullity or voidability, contact attorney Jurij Kutnjak for legal advice and ensure you make the right choice for your case.

Can heirs of the donor demand the annulment of a gift agreement after the donor's death?

If there is not enough inheritance to satisfy the forced heirs' entitlements, meaning there is a deprivation of their statutory shares, they can demand the annulment of the gift agreement and the return of the gift to the estate, in the value necessary to redress the deprivation of the forced heirs' shares.

Forced heirs can demand the return of the gift (annulment of the gift agreement) from the lawful heir, regardless of when the gift was made. From other individuals, forced heirs can only demand the return of gifts made within the last year of the donor's life.

Gifts are returned in the reverse order of their giving, starting with the most recent gift. Simultaneously given gifts are returned in proportion.

If you need assistance from an attorney in representing you in inheritance matters and the annulment of gifts to remedy the deprivation of forced heirs' shares, contact attorney Jurij Kutnjak and ensure you make the right choice for your case.

Gift agreements between spouses or unmarried partners

Spouses and unmarried partners can enter into any legal transactions between themselves that they can also enter into with other persons. According to the provisions of the Family Code, agreements concerning property rights and obligations between spouses or unmarried partners must be concluded in the form of a notarial deed. An exception applies to customary minor gifts.

For the validity of contracts governing the property rights and obligations between spouses or unmarried partners, it is therefore necessary to conclude the contract in the prescribed form of a notarial deed.

Regarding gift agreements between spouses or unmarried partners, even in the case of the dissolution of the union or the annulment of a marriage, gifts made before or during the marriage or partnership must be returned. Gifts do not need to be returned if they are customary minor gifts proportional to the spouses' or partners' financial situation or if the spouses or partners have agreed otherwise in a notarial agreement.

Gifts must be returned in the condition they were in at the time the claim was filed. If they were disposed of, the monetary equivalent or the received item must be returned.

For legal advice and the drafting of contracts between spouses or unmarried partners, contact an attorney who will advise you and assist you in drafting the appropriate contract.

Gift agreements between parents and children

Gift agreements between parents and children do not need to be concluded in a special form unless they involve a gift promise or the gift is real estate. In this case, written form is sufficient, and there is no requirement for a notarial deed.

If the recipient is a minor and therefore lacks full legal capacity, the Civil Code specifies who can represent the minor recipient in concluding the contract and when the permission of the competent social work center is required. Both of these factors affect the validity of the gift agreement and, in the case of real estate, are a condition for the registration of the recipient's property rights in the land register.

When concluding a gift agreement between parents and children, as well as between spouses or unmarried partners (i.e., recipients who will have the status of spouses or forced heirs in the donor's inheritance), it is necessary to consider the legal consequences on inheritance and inheritance claims.

When there are multiple heirs, they can demand that a gift be accounted for in a specific heir's inheritance share. In the case of the deprivation of a forced heir's share, forced heirs can even demand the return of the gift to the estate and the annulment of the gift agreement.

For legal advice and the drafting of gift agreements between parents and children, contact attorney Jurij Kutnjak for advice and the drafting of a contract in the prescribed form and desired content.

Gift agreement for agricultural land

Non-gratuitous transactions involving agricultural land, forests, or farms are legally limited to a specific circle of recipients, who can only be:

• Spouses or unmarried partners, children, parents, siblings, nephews or nieces, and grandchildren;
• Sons-in-law, daughters-in-law, or unmarried partners of children if they are members of the same farm;
• The holder of the farm who has received support from the rural development program as a young farm successor, and no more than five years have passed since taking over the farm;
• Local community or the state.

 

The donor can only give the entire (co-)ownership share of agricultural land, forest, or a farm to the recipient since the (co-)ownership share of the donor must not be divided.

Stricter rules apply to protected farms under the Agricultural Farms Inheritance Act. Protected farms must not be divided, except in cases prescribed by law (e.g., enlargement or rounding-off of an existing protected farm, the creation of a new protected farm, the alienation of building land, etc.).

The procedure with the publication of a gift offer at the administrative unit is not necessary, and therefore, approval of the legal transaction is not required, except when the subject of the gift is a protected farm. In that case, approval from the administrative unit is required, and the administrative unit approves the transaction or gift agreement if the specified legal conditions are met.

The gift agreement or land registry authorization, which is confirmed by the Financial Administration of the Republic of Slovenia (FURS) after the payment of any applicable taxes (inheritance and gift tax, capital gains tax), requires notarization of the donor's signature and registration in the land register for the transfer or acquisition of property rights.

For legal advice and the drafting of a gift agreement for agricultural land, forest, or a protected farm, contact attorney Jurij Kutnjak, who will advise you on how to proceed with the conclusion of the gift agreement.

Tax treatment of gifts

When taxing gifts received by individuals, it is crucial to consider who the donor and recipient are, as well as the value of the gift. The recipient can be liable for personal income tax or inheritance and gift tax.

For more specific information, click on the link to the field of tax law or contact attorney Jurij Kutnjak by phone or email.