Frequently asked questions about donations from parents to children

Article 618 of the Civil Code defines donation by stating that "donation is an act of liberality by which a person gratuitously disposes of a thing in favour of another, who accepts it." In similar terms, article 531.7 of the Civil Code of Catalonia defines it as "the act by which donors gratuitously dispose of a good in favour of the donees, who acquire it if they accept it during the donors' lifetime."

Donation is, therefore, an act of liberality, that is, a gift made during a person's lifetime in favour of another. Although there are mortis causa donations, in this article we will focus on those made and produced during the donor's lifetime.

Having defined donations from parents to children, we will resolve the most common doubts:

The community property regime is a matrimonial system in which the assets acquired during the marriage are considered joint property of both spouses, regardless of who bought them or how much each contributed financially to their acquisition.

Assets donated to a child married under the community property regime or separation of assets (or who will be in the future) are considered the child's separate property, that is, their exclusive ownership. However, if the parents of one of the spouses want the assets to belong to both, either equally or to the marital partnership, this must be expressly stated.

In the event that money is donated to a child who is married or will marry under the community property regime, it is important that if the money is used to acquire a property, the spouse appears to expressly declare that the money is separate property, because otherwise it will be presumed to be community property and, consequently, so will the acquired asset.

Donation, as we have said, is an act of liberality or gratuitousness and, therefore, dependent on the will of the donor. All kinds of goods can be donated, whether one or several, both movable and immovable, money or businesses. Logically, those illicit goods or those that the donor cannot dispose of because the law prohibits it would be excluded.

Now, depending on the object donated, donations from parents to children may have certain tax implications, as we will see in the following post.

This type of donation is one of the most common, along with vehicles, money or shares or stocks in corporate entities. For this, a public deed of donation must be granted before a Notary. Many of you also ask us if it is possible to donate a house to one child when there are other children, and as we have mentioned, the answer is yes. The deed must state whether the donation is subject to collation or not.

Warranty is the obligation of the transferor to deliver the good or right to the purchaser free of hidden defects or faults and to guarantee its peaceful possession, that is, that no one claims it as the true owner being a third party. This figure is typical in sales and other onerous transfers.

Regarding warranty and donation, article 638 of the Civil Code states that "the donee subrogates all the rights and actions that in case of eviction would correspond to the donor. The latter, however, is not obliged to warrant the donated things, except if the donation is onerous, in which case the donor will be liable for eviction up to the amount of the encumbrance." Article 531.13, for its part, states that "Donors are not required to guarantee either the legal defects or the material defects of the donated goods. Nevertheless, notwithstanding the provisions of paragraph 1, donors, if they deliver the good knowing it is someone else's or knowing its hidden defects, must compensate bona fide donees for the damages suffered. Furthermore, notwithstanding the provisions of paragraph 1, donors, if the donation is conditional or with a charge, must guarantee conformity up to the value of the encumbrance."

We can say that since the donor has received nothing in return, as the donation is gratuitous, it is logical that, in principle, if later the donee is totally or partially deprived of the thing by the true owner or due to some defect, the loss falls on them, and consequently, they benefit less than initially expected. But there are two exceptions, in which claims can be made against the donor:

1. that the donation was made in bad faith, causing harm to the recipient of the thing.
2. that the donor had requested a consideration from the donee (less than the donated thing, since otherwise it would not be a donation but a sale or exchange, for example), in which case claims can only be made up to the amount of the encumbrance.

In short, in principle, children cannot claim against their parents for any defect in the donated thing, unless the parents made the donation to the detriment of the children, which is not the most common, although anything can happen, or unless they requested something in return.

In both cases, there are differences between Common Law and Catalan Law, as they are opposed in this respect. In Common Law, in principle, any inter vivos donation to a child is imputable to the compulsory portion and must be accounted for in the partition, and for it not to be so, it must be expressly stated in the deed of donation. However, in Catalonia, donations are not accounted for, unless they are expressly given this character or made as part of the compulsory portion or are imputable to it, which must also be done expressly.

Many parents worry that, once the donation to a child has been made, the beneficiary, having received what they want, will push them out of their life or forget about them, especially when there are daughters-in-law or sons-in-law involved. In principle, once the donation has been made, it cannot be revoked, that is, it cannot be annulled and the donated item recovered. However, there are several reasons why a donation can be revoked. These reasons are set out in articles 644 and following of the Civil Code and in article 531.15 of the Catalonia Civil Code.

But focusing on the specific case of children, the main cause for revocation is ingratitude. Regarding ingratitude, article 648 states that "the donation may also be revoked, at the donor's request, for cause of ingratitude, in the following cases:

1. If the donee commits any crime against the person, honour or property of the donor.
2. If the donee accuses the donor of any crimes that give rise to official proceedings or public prosecution, even if proven; unless the crime was committed against the donee themselves, their spouse or children under their authority.
3. If they unjustly deny them maintenance."

Furthermore, following a flexible and current interpretation, the Catalonia Civil Code states in its article 531.15D that "causes of ingratitude are the criminally punishable acts that the donee commits against the person or property of the donor, the children, the spouse or the other member of the stable couple, as well as, in general, those that represent behaviour towards the same persons not socially accepted." Psychological abuse or abandonment is even admitted as a cause for revocation.

The action granted to the donor for cause of ingratitude cannot be waived in advance. This action expires after one year, counted from when the donor became aware of the fact and had the possibility to exercise the action.