We have clients who want to gift to their ownership in New Jersey Real Estate. These clients want to complete their gift in 2022. It is our practice that when clients gift property, we have them sign a deed which is then notarized. Sometimes, a deed transferred title to the property is signed prior to December 31st but doesn’t get to the County Clerk for recording until January 1st of the following year. The question raised is whether the gift has been made in 2022 or 2023 for NJ and federal estate tax exemption purposes.
A gift normally occurs when the donor parts with dominion and control, meaning ownership. My position is that a gift doesn’t occur until the gifted property is delivered to the possession of the person receiving the gift. In the case of a real estate deed, this means that the gift donor hand over the deed to the donee. Therefore, if the deed is signed, mailed and received by the donee or the county clerk by 12/31/22, (I think) the gift occurs in 2022, but if not, then the gift is in 2023.
A completed gift requires acceptance. If a deed is signed by the grantor, then a donee can sign a gift letter acknowledging the gift and adding a notation section at the end accepting the gift with his/her signature. I would also promptly record the deed with the date of deed matching date of gift.
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 still requires the Apostile or not. The US Embassy can certainly do the Apostile if needed.
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By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Estate Planning Attorney