I want to donate a property to my son (II): What if I have other sons?

As a continuation of the previous article (I want to donate a property to my child: I. What should I bear in mind?), we proceed to analyse this same donation case in the event that the donors did not have only one descendant.

But what if I want to donate the property to one of my sons, but I have another son?

In this article we are going to consider different situations, in the case of two siblings and assuming the good faith of the donors and their desire for equitable treatment of their children, since it is clear that there may be other contexts that we cannot contemplate in the same article (disinheritance, unequal treatment, wanting to favor one child over another, etc.).

We must remember that children are forced heirs or legitimates heirs, so certain limits must be respected when receiving assets or rights, so that the legitimate rights of both are not harmed.

The strict legitimacy is that part of the inheritance that corresponds by law to the forced heirs and of which they cannot be deprived. In other words, this part must be divided up between the two siblings proportionally.

In this case, different alternatives can be proposed according to the donors’ wishes:

1. Donate the property to one of them and do not compensate the other until the time of inheritance

At the time of the donation, this case does not entail any problem, but it can have consequences at the time of awarding the inheritance upon the death of the donors.

The parents can include in the deed of donation that it is not collationable, so that it is consider when distributing the inheritance. However, it is important to consider that a non-collationable gift to a forced heir will always have to be included in the inventory of the inheritance.

When the time comes for the distribution of the estate, several scenarios may occur:

• If the donation affects the reserved share, and, therefore, the other forced heirs may be affected by said donation, it will consider inheritance. In this case, the donee must pay the other heirs the part that corresponds to them as legitimate, even if the donation is not collationable. In other words, it would be a donation considered inofficious.
• If it does not affect the legitimate, it will be brought to the inventory, but it will be bear in mind in the “third of improvement” or free disposal so it will not have any negative report towards the donee.

2. Donate the property to one of them and compensate the other during life

Another possibility, in order for the donors to wish that both siblings are on equal terms in life, would be to donate the property to one of them and make a monetary donation to the other sibling for the part that would correspond to him.

Obviously, it is not always feasible to do this, especially if the amounts are very high, although the monetary donation would not have the tax burden that the property has on the donor as there is no capital gain or value added, only the gift tax for the donee.

3. Donate the house to both of them and have one of them acquire the other part

It would be possible to donate the property to both brothers and for one of them to acquire the 50% that belongs to the other, obtaining full ownership of the property (the half that was donated to him and the half that he acquires to his brother) and not causing any damage to the inheritance, since the donation was made in the same proportion.

In this case, instead of a sale between the parties, the legal figure of the extinction of the joint tenancy could be chosen: it consists of the property passing into the hands of one of them and the other party receiving economic compensation equivalent to its share.

The only requirements to carry it out is that there is a common good in a situation of co-ownership and that one of them wants to part with it. It is necessary to sign a deed of extinction of joint tenancy and adjudication.

From a tax perspective, it is much cheaper than a purchase and sale for the purchaser. This figure is taxed by Stamp Duty, whose general rate is 1.2%, in the case of Andalusia, on the value of the property of the part of the community member whose participation disappears, as long as the property is awarded to a single person and is compensated in cash. You would only have to add the costs of the notary and registration in the Land Registry.

In the end, a donation is a good option to benefit sons in life, but it can trigger various situations and complexities that should be studied before making the decision.