It's The Law
Stock Might Be Effective, Even Though Not Complete
My father was signing over some stock to me and before he finished changing the name of the certificates, he died. My sister claims the stock is now part of his estate and is not mine. That would mean she gets half. Is she right?
A gift is a voluntary transfer of something by one to another without payment or compensation from the recipient. Gifts can be inter vivos or
causa mortis. An
inter vivos gift is a completed gift from one living person to another and can be either real estate or personal property. A gift
causa mortis is a gift of personal property made by a donor expecting to die shortly with a gift to be absolute only when the donor dies. For a gift
causa mortis, the item must be delivered to the recipient and the recipient must retain it until the donor's death. Gifts
causa mortis are not favored by the courts because they circumvent the formalities required of a will.
Florida cases have generally held a valid gift must satisfy three criteria: 1) the donor must have donative intent; 2) the gifted item must be delivered to the recipient; and 3) the gift must be accepted by the recipient. In 1921, Florida's Supreme Court addressed the issue of delivery with respect to a life insurance policy. It confirmed delivery could be actual or constructive as long as intent was to pass title irrevocably. The Court explained that merely expressing intent to change a beneficiary and notifying the insurer of such intent is insufficient. When the policy was not assigned to another nor delivered or surrendered as a gift, title remained in the insured's name and no gift was made.
Delivery can be made to a third party for benefit of the donee. But, words or circumstances must clearly show the donor intended to give up all control of the gifted matter. There is no gift if the item is delivered to a third party with instruction to hold it until the donor provides further direction.
All of these Florida cases would seem to make your claim difficult. But, the recent case of Welch v. Dececco may help you pull a rabbit out of the gifting hat. In
Welch, the Trial Court ruled that Welch's uncle had not transferred Exxon Mobile stock to him by
inter vivos gift because the stocks were still registered in the uncle's name when the uncle died. The Trial Court apparently ruled that Welch failed to prove donative intent because the stock registration had not been changed.
The Appellate Court reversed and said the matter required more thorough review. The Appellate Court explained that the elements of an inter vivos gift are: present donative intent, delivery and acceptance. It agreed that stock registration could be properly considered in determining donative intent, but that stock registration was not necessarily dispositive. Because it was unclear from the Trial Court order whether the Court focused exclusively on stock registration, the Appellate Court sent the
Welch case back for the Trial Judge to either clarify he considered all relevant evidence or reconsider the ruling after review of all relevant evidence.
Delivery and change of registration would certainly be preferable. But, the facts of your case may lead to success at trial based on the Welch decision. You should consult with an experienced attorney to discuss all relevant facts associated with your claim.
By: William G. Morris, Esquire
William G. Morris is an attorney with offices at 247 North Collier Boulevard on Marco Island, Florida. His practice covers a broad range of subjects, including civil litigation, real estate, business and corporate law, estate planning and probate, domestic relations and contracts. He writes this column periodically with respect to legal matters that frequently affect non-lawyers. The information contained in this column is not intended as legal advice and, of necessity, is generalized. For questions about specific circumstances, the reader should consult a qualified attorney.
Questions for this column can be sent to: William G. Morris, e-mail: firstname.lastname@example.org or by fax, (239) 642-0722 or
The Marco Island Eagle
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