Lifetime Gifts Compared With Leaving an Estate

What this gifting property before death guide covers

Many families plan to give a home to a child during their lifetime so that there is no dispute after death. The intention is sound, but it only works if the registration step is completed.

The basic difference when gifting property before death

A hibah is a gift made while the giver is alive. An estate is what is distributed after death through whichever route applies. The practical difference is timing, and who carries the work.

Why registration decides everything

For land, ownership follows the register. Signing a gift document changes nothing on the register unless a transfer follows and the land office registers it.

That means when the giver dies, the property is still in their name and forms part of the estate, even though the family believed it had been given away. We see this, and it is difficult to unwind after a death.

What to think about before gifting property before death

• Whether the giver still needs the property for a home or for income
• The effect on other beneficiaries, particularly where only one child receives
• Whether the property is still charged, since the bank’s consent is needed
• Restrictions on the title requiring authority consent
• The stamp duty treatment that applies to transfers between close family

The steps that make gifting property before death effective

For land the steps are the same as any transfer: the gift document is prepared and signed, the transfer instrument is prepared, stamp duty is paid, any required consents are obtained, and the transfer is registered at the land office.

That last step is the decisive one. Without registration the title stays in the giver’s name and the property still falls into the estate on death.

If the property is charged, the bank’s consent is needed before registration. Settle that before the documents are drawn up, not after.

Cost and timing compared with an estate

A lifetime gift carries transfer costs: legal fees, stamp duty after any relief that applies, and registration fees. Those costs are paid now.

An estate carries application costs after death, and the timeline depends on which route applies. Those costs are paid later, by the family.

The useful comparison is not only the total, but who pays and when. Some families choose a gift because it reduces the burden on beneficiaries at a time when they are grieving.

When a gift is not the right choice

If the giver still needs the property as a home or as a source of income, an outright gift may be premature.

If the property is still charged and the recipient cannot take over the loan, the gift cannot be perfected.

Where there are several children and only one receives, the effect on family relationships has to be thought through. A gift that is legally valid can still divide a family if it is not discussed.

The effect on other family members

A perfected gift takes the property out of the estate, so the other beneficiaries no longer have a share in it.

For Muslims, a gift made while the giver was gravely ill can be questioned. The giver’s state of health at the date of delivery becomes relevant.

Tell the family sooner rather than later. Gifts known about while the giver is alive rarely end in court.

Questions worth asking before deciding

Whether I still need this property as a home or as income.

Whether the recipient can take over the loan if the property is still charged.

What the effect is on other family members, and whether they have been told.

What the transfer costs now against the estate costs later.

Whether a will or another arrangement suits my aim better.

Frequently asked questions about gifting property before death