WHEN GIFTING REAL ESTATE IN NJ – WHAT IS THE ACTUAL DATE OF THE GIFT?

By Fredrick P. Niemann, Esq. a NJ Estate Planning Attorney
 
We have clients who gifted their interests in New Jersey Real Estate. These clients wanted to complete their gift in 2012.  It is our practice that when clients gift property, we have them sign a deed which is then notarized.  In this case, the deed was signed prior to December 31, but didn’t get sent to the County Clerk for recording until January 5, 2013 (because the clients were out of the US). The question raised was whether we can still consider the gift as having been gifted in 2012 for NJ and federal estate tax exemption purposes?

A gift normally occurs when the donor parts with dominion and control as determined under NJ law.  My position is that a gift doesn’t occur in NJ until the gifted property is delivered.  In the case of a deed this would mean that the donor gives the deed to the done.  Therefore, if the deed is signed and mailed to the donee or the county clerk by 12/31/12, (I think) the gift occurs in 2012, but if the grantee holds the deed until returning to the U.S. in 2013, then the gift is in 2013.  It certainly should be possible to transmit a duly executed deed for recording in 2012, but you have to make sure that the foreign person who takes the acknowledgement satisfies the NJ recording requirements.  It can’t just be a foreign notary.

A completed gift requires acceptance. If a deed is only signed by the grantor, then one could have donee sign a gift letter reciting the gift and add a section at the end for the grantor to sign accepting the gift with both signatures dated. I would also promptly prepare and the deed for recording with date of deed matching date of gift. Even if recording in January I think you will be fine.

If having anything notarized in a foreign country then the “notary” can be done at a US embassy in the foreign country or if that country is part of The Hague Convention it can be done with an Apostile Certificate. Not sure if having it done at US Embassy would still require the Apostile or not. The US Embassy can certainly do the Apostile if needed.

Contact me personally today to discuss your New Jersey estate planning matter.  I am easy to talk to, very approachable and can offer you practical, legal ways to handle your concerns.  You can reach me toll free at (855) 376-5291 or e-mail me at fniemann@hnlawfirm.com/.

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