Effect of Gift as Between Parties

A completely executed gift generally operates, as between the parties to the transaction, as a full and complete transfer of the title to the property from the donor to the donee.  Courts have held that in order to constitute a completed gift, there must be: (1) an intention of the donor to presently give; (2) a subject matter capable of passing by delivery; (3) an actual delivery; and (4) an acceptance by the donee. See, Sinclair v. Fleischman, 54 Wn. App. 204, 207 (Wash. Ct. App. 1989). When a gift occurs, ownership vests immediately to the donee and is absolute.

On the other hand, an incomplete or unexecuted gift confers no rights upon the donee.

A donee acquires only whatever interest his or her donor had in the subject of the gift.  For e.g., in Clark Jewelers v. Satterthwaite, 8 Kan. App. 2d 569 (Kan. Ct. App. 1983), the donor purchased jewelry from a store with a down payment and gifted it to the donee.  The donor executed a security agreement and financing statement in favor of the store. However, the donor failed to pay the balance.  The court held that the donee took the jewelry subject to the security interest and acquired only the interest the donor had in the property.

Inside Effect of Gift as Between Parties