GPNA Tip of the Week: Gifting Real Estate

GPNA Tip of the Week: Gifting Real Estate

Written on October 22nd, 2020

Meet with an attorney to make sure your intent is clear at the time you make a gift of real estate and plan for any complications which may arise if a divorce occurs. A person making a gift, the “donor”, will have their intent judged by a South Dakota Court at the time the gift is made. Additionally, if you plan to gift the real property at a discount under a contract for deed, be careful about how you classify the ownership interest of the person receiving the real property, the “donee.” A gift of real property to a husband and wife as joint tenants with rights of survivorship will be considered convincing evidence of the real property’s status as marital property.

This GPNA tip is derived from Field v. Field, 2020 S.D. 51, ¶¶ 19-24, -- N.W.2d --, 3-5 (S.D. 2020) which was released by the South Dakota Supreme Court on September 9th, 2020. In that case, the Supreme Court reversed a circuit court’s determination that a relative’s gift of the family farm to a husband and wife at a significant discount was separate and non-marital property. The Supreme Court reversed, stating that a donor’s intent is judged at the time the gift is made and the relative here gave the property to the husband and wife as joint tenants with rights of survivorship thus making it marital property capable of division at divorce.

Read the Supreme Court’s decision here.