Capacity to Accept a Gift

As a general rule, any person capable of holding title to property may be the recipient of a gift.[i]  A person who accepts a gift is called a donee.  Acceptance means that the donee unconditionally agrees to take the gift.  It is necessary for the donee to agree at the same time the delivery of the gift is made.  

Gifts may be made to minors under whichever version of the Uniform Gifts to Minors Act, as revised in 1966 (UGMA), or the Uniform Transfers to Minors Act (UTMA) has been adopted in a particular state.  If an organization has the capacity of accepting and holding a gift, it is prima facie entitled to the gift.[ii]

The Uniform Gifts to Minors Act (UGMA) as revised in 1966, provides that “an adult person may, during his or her lifetime, by transfer to a custodian in the manner provided in the Act, make a gift of a security, a life insurance policy, an annuity contract, or money to a person who is a minor as of the date of the gifts.”  A gift under the UGMA conveys all of the donor’s rights to the minor donee. In effect, although the custodian is in the control and possession of the subject matter of the gift, full ownership vests in the donee.[iii]  The custodian will be given the right to manage the subject matter of the gift.  Any gift made under the UGMA may be made to only one minor, and only one person may be the custodian.[iv]

 

[i] Snowden v. Crown Cork & Seal Co., 114 Md. 650 (Md. 1911)

[ii] 38 Am Jur 2d Gifts § 15

[iii] In re Estate of Zeigher, 95 Misc. 2d 230 (N.Y. Sur. Ct. 1978)

[iv] Unif. Gifts to Minors Act § 2(b), 8A ULA 382 (1993)

 

 


Inside Capacity to Accept a Gift