Skip to main contentGifts
Elements Required for a Valid Gift
A valid gift requires three elements:
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Intent - Grantor must intend to divest themselves of title
- Present intent required (not future intent)
- “I want to give you” = insufficient (future intent)
- “I will give you” = shows future intent
- “This is yours” = present intent
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Delivery
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Actual Delivery - Physical, manual transfer of the gift
- Physically handing the item to the recipient
- Preferred method when possible
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Constructive Delivery - Delivery through an instrument or symbolic item
- Only valid when actual delivery is impractical or impossible
- Examples: Handing over car keys, title/pink slip
- If manual delivery is possible, constructive delivery is ineffective
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Symbolic Delivery - A form of constructive delivery
- Transfer of something symbolic of the gift
- Historical example: Clot of dirt or key to symbolize land transfer
- Example: Car key in a box symbolizing the car
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Acceptance
- Presumption: If something is objectively valuable and recipient does nothing to reject it, acceptance is presumed
- To reject, donee must take affirmative action evidencing rejection (e.g., pushing it back, stating “I don’t want this”)
- Mere silence or inaction = acceptance for valuable items
Newman v. Bost (1898)
Facts: Van Pelt (decedent) was a wealthy, bedridden man with Newman (his housekeeper) caring for him. On his deathbed, Van Pelt handed Newman keys to a bureau, stating the keys and everything in the bureau were for her. Inside the bureau were life insurance policies worth approximately $3,000.
Issue: Whether delivery of keys to a bureau constituted valid delivery of the life insurance policies contained within.
Rule:
- Constructive delivery is valid only when actual delivery is impractical or impossible
- If an article is present and capable of manual delivery, it must be actually delivered
Holding:
- Bureau: Gift was valid - keys constituted effective constructive delivery because manually delivering large furniture would be impractical
- Life Insurance Policies: Gift failed - the policies were small, portable, and easily capable of being handed over, so constructive delivery was insufficient
Analysis:
- The decedent was capable of handing over the key, so he was also capable of handing over the life insurance policies
- Since manual delivery was possible, constructive delivery could not substitute
- Court was concerned about fraud - only the caretaker’s testimony supported the alleged gift (no corroboration)
Key Principle: When property can be manually delivered, constructive delivery is ineffective to legally transfer a gift.
- Gifts constitute separate property in marriage
- Not subject to community property division
- More thoroughly covered in Community Property course
Acquisition by Creation
Property Interest in News
General Rule: The news itself (facts about public events) cannot be owned or monopolized. Everyone has the right to report on public events.
Freedom of the Press:
- Everyone is “the press” under the First Amendment
- No exclusive ownership of news about public incidents (e.g., 9/11, natural disasters, nuclear attacks)
Investigative Reporting Exception:
- When a reporter/agency creates news through their own efforts and resources (investigative journalism), they gain a temporary quasi-property interest
- This interest requires others to:
- Give credit to the original source
- Respect the reporter’s work for a limited time period
- Allow the original reporter to receive economic benefit
Rationale:
- Without this protection, no one would be incentivized to conduct investigative journalism
- Other outlets would simply copy the work without compensation
- The industry would “wither away and die”
Example: Reporter investigates and discovers LA County Jail is serving rats to inmates. Other news outlets must credit the original reporter/publication (e.g., “The LA Times reports…”) and cannot immediately claim the story as their own discovery.
Distinction:
- Public incidents (not created by reporter’s efforts) = no exclusive interest
- Investigative discoveries (created through reporter’s efforts) = temporary quasi-property interest
International News Service v. Associated Press (1918)
This case deals with the property interest in news created through investigative efforts and reporting. The principle established over a century ago remains relevant today regarding first impression rights and who can claim credit for breaking stories.
Patents and Living Organisms
Diamond v. Chakrabarty (1980)
Facts: Petitioner created a bacteria capable of breaking down crude oil for use in oil spill cleanup. Patent application was denied on grounds that bacteria is a living organism and a product of nature.
Issue: Can a living organism be patented?
Rule: A living organism can be patented if it is:
- Man-made (not naturally occurring)
- New (novel)
- Useful
- The product of human ingenuity
Holding: The genetically engineered bacteria was patentable because it was not naturally occurring - it was manufactured through human ingenuity.
Key Principle: Living organisms that are products of human manufacture and ingenuity (not naturally occurring) are capable of being patented.
Policy Implications:
- Pharmaceutical companies can patent manufactured cancer-fighting cells
- Patent holders can prevent others from using similar treatments
- May suppress research by competitors who independently develop similar solutions
Property Interest in One’s Body
Moore v. Regents of the University of California
Facts: Patient required medical procedure (removal of cells/tissue). Doctor did not disclose that patient’s cells were valuable for medical research. After extraction, doctor used cells for research purposes.
Issue: Do individuals have a property interest in their body parts, cells, and biological materials after removal from their body?
Holding:
- Once biological materials are removed from the body, the individual loses property interest in them
- Cannot keep removed body parts (tonsils, appendix, blood, etc.)
- Doctors cannot give patients their extracted body parts in a bag
Rationale - Public Policy Considerations:
- Hazardous Materials: Human biologicals can be hazardous and require proper handling/disposal
- Medical Progress: Using biological materials for medical research advances science and benefits society
- Waste Management: Standardized procedures needed for disposing of medical waste
Tort Claim:
- Doctor breached fiduciary duty by not disclosing the value of patient’s cells
- Physicians have duty to inform patients when their biological materials have significant value
- However, this does not create ongoing property interest in the materials after removal
Note: The case was primarily a conversion claim (tort), but property principles apply to determine whether there was property that could be converted.
Present and Future Interests - Introduction
Overview
This section covers estate planning and the transfer of property interests. The material applies to:
- Land (most common teaching example)
- Personal property (cars, chattels)
- Any transferable asset (“Grandma’s CVS China”)
Critical Concepts
Two Universes of Law:
- Common Law - Hundreds of years old; applies to bar exam multiple choice questions
- Modern Law - Contemporary principles; generally applies to essays unless specified otherwise
Important:
- You must know both common law and modern law
- Fact patterns will indicate which applies, or you may need to discuss both
- “If they have an iPhone” = use modern principles
The Architect Concept:
- O = Owner/Grantor (the architect who designs the property’s path)
- A, B, C = Recipients/Grantees
- O decides who gets property, for how long, and under what conditions
Fundamental Rule: Property will always go somewhere - it never just “floats around”
Conveyance Limitation: You can only convey an interest equal to or less than what you have (never more)
Fee Interests (3 Types)
1. Fee Simple Absolute (FSA)
Definition: The maximum ownership interest possible - complete, absolute ownership
Duration: Forever and ever; survives owner’s death and passes to heirs or designated beneficiaries
Common Law Requirements:
- “O to A and his/her heirs”
- MUST include the word “heirs”
- Without “heirs” = creates only a life estate (not FSA)
Modern Law:
- “O to A” is sufficient
- Word “heirs” NOT required
- Presumption: Grantor intends to transfer the largest possible estate
Example Conveyances:
- Common Law: “O to A and her heirs” = Fee Simple Absolute
- Common Law: “O to A” = Life Estate (NOT FSA)
- Modern: “O to A” = Fee Simple Absolute
Owner’s Rights:
- Use property however desired
- Sell property
- Transfer by will
- Property passes to heirs if no will
Key Distinction:
- FSA vs. Life Estate: FSA continues after death; Life Estate terminates at death
- Life Estate holder cannot put property in their will (no interest to convey after death)
2. Fee Tail
Status:
- Common law only + minority of states (approximately 4 states)
- ABOLISHED in modern majority jurisdictions
Purpose: Keep land within lineal descendants (bloodline/DNA)
Common Law Language: “O to A and the heirs of her body”
Effect:
- Property can only pass to A’s lineal descendants (children, grandchildren, etc.)
- Limited to bloodline only
Modern Interpretation:
- Modern majority jurisdictions treat fee tail language as creating Fee Simple Absolute
- Fee tail has been abolished in most states
Future Interest - Reversion:
- O retains a reversion
- If A dies without lineal descendants (no children), property reverts back to O (or O’s heirs)
- Prevents property from “floating” - it must go somewhere
Example:
- “O to A and the heirs of her body”
- Common law: A has fee tail; property stays in A’s bloodline
- If A never has children, property reverts to O
- Modern law: A has fee simple absolute
3. Defeasible Fees
Note: This topic was introduced but postponed in this session. Will be covered after Life Estates.
Three Types (to be studied later):
- Fee Simple Determinable
- Fee Simple Subject to Condition Subsequent
- Fee Simple Subject to Executory Limitation
Life Estates (3 Types)
General Characteristics of Life Estates
Duration: Only for the duration of a specified person’s life
Termination: Interest automatically terminates upon death of the measuring life
Non-Devisable:
- Cannot be transferred by will
- Holder has no power to designate property after death
- Last breath = property gone
Alienability: Life estate holder CAN sell/transfer the life estate, but transferee’s interest is limited by the measuring life
1. Life Estate - Life of the Grantee
Modern Law Requirements:
- Must include “for life”
- “O to A for life”
Common Law:
- “O to A” = creates life estate (no “heirs” = not FSA)
- No requirement to say “for life”
Effect: A has property for A’s entire life, then it terminates
Example:
- “O to A for life”
- A has present possessory interest in life estate
- Duration: A’s life
- When A dies, interest terminates (cannot pass by will)
Murder Motive: Recipients of future interests (who take after A dies) have motive to murder A to accelerate their interest
2. Life Estate Per Autre Vie (Life of Another)
Definition: Life estate measured by the life of someone other than the grantee
Language: “O to A for the life of B”
Effect:
- A has the property
- A’s interest lasts only until B dies
- When B dies, A loses the property (even if A is still alive)
Murder Motive: A has incentive to keep B alive (no motive to murder B)
Reversion: When B dies, property typically reverts to O (future interest coverage upcoming)
Unresolved Issue: If A dies before B:
- Some sources: Property reverts to O (because O’s intent was specific to A)
- Professor’s modern view: Property passes to A’s heirs until B dies
- Sources contradict each other on this point
Selling a Life Estate - Creating Per Autre Vie
Scenario:
- O conveys to A for life
- A sells to B
Result:
- B receives a life estate per autre vie
- B’s interest measured by A’s life (not B’s life)
- When A dies, B loses the property
- B can never possess property longer than A’s life
Rationale:
- O gave specific directions: property for A’s life only
- A cannot convey more than A has
- B’s interest is “under the umbrella” of A’s life estate
- A’s life is the maximum duration
Practical Implications:
- Buyers need to be aware they’re buying limited interest
- Risk of fraud: A might misrepresent to B that conveyance is fee simple absolute
- If A dies and B remains on property without O’s consent = B becomes adverse possessor
- Potential claim: Adverse possession based on color of title (defective deed)
3. Defeasible Life Estates
Note: Postponed for future session
Three Types (to be covered later):
- Life Estate Determinable
- Life Estate Subject to Condition Subsequent
- Life Estate Subject to Executory Limitation
These work similarly to defeasible fees and will be covered after defeasible fees are taught.
Study Tips and Warnings
Difficulty Level
- Students consistently report this is the most challenging section of Property
- Not inherently “hard” but easy to lose grasp of concepts
- Material typically “clicks” around Thanksgiving (several weeks after introduction)
- Requires consistent review and practice
Common Pitfalls
- Contradictions: Textbooks contradict themselves; courts misidentify estates; supplement sources disagree
- Compounding complexity: Starts simple, becomes increasingly complex
- Must understand basics before moving to advanced scenarios
Success Strategy
- Master the basics first (white belt before black belt)
- Review constantly - material compounds quickly
- Don’t underestimate the difficulty
- Call professor with questions (texting inefficient for complex questions)
- Keep up week-by-week (cannot catch up at week 14)
Bar Exam Note
- Common law = Multiple choice questions
- Modern law = Essay questions (unless specified otherwise)
- Must know both systems
Key Terminology Review
- O = Owner/Grantor (the architect)
- A, B, C = Grantees/Recipients
- FSA = Fee Simple Absolute
- Grantee = Person receiving property
- Grantor = Person conveying property
- Heirs = Those who inherit (required word in common law FSA)
- Lineal descendants = Bloodline (children, grandchildren, etc.)
- Reversion = Future interest retained by grantor
- Present possessory interest = What someone has RIGHT NOW
- Future interest = What someone will receive later
- Per autre vie = “For the life of another”
Exam Tips
- Always identify whether common law or modern law applies
- Parse the language carefully - every word matters
- Identify O (the architect) first
- Determine what A receives (present possessory interest)
- Remember: Property always goes somewhere (never “floating”)
- Check for key words: “heirs,” “for life,” “heirs of her body”
- Life vs. Fee: Can it be put in a will? If no, it’s a life estate
- Conveyance rule: Can only convey equal to or less than what you have
