In Walsh v. Bowen (Ga. App. 2023), the Court considered whether an inter vivos gift to a 529 account was a completed gift. Rick Walsh made transfers during his lifetime to a 529 account his wife, Alice Walsh, owned for the benefit of her grandchildren. Although there was evidence Mr. Walsh contemplated the gift earlier, the paperwork was not finalized until shortly before his death and at least one previously executed authorization wasn not faxed in until the day after his death. His executor alleged the funds were estate property. The probate court found for the executor, holding there was no completed gift. That decision was appealed to superior court for a de novo review. The superior court granted the executor summary judgment, holding there was no completed gift. Mrs. Walsh appealed.
In deciding the case, the Court stated that “an inter vivos gift operates “in the donor’s lifetime, immediately and irrevocably; it is a gift executed; no further act of parties, no contingency of death or otherwise, is needed to give it effect.” Longstreet, 312 Ga. App. at 5 (2) (citation and punctuation omitted). A valid inter vivos gift must meet three statutory criteria: “(1) The donor must intend to give the gift; (2) The donee must accept the gift; and (3) The gift must be delivered or some act which under law is accepted as a substitute for delivery must be done.” OCGA § 44-5-80. Delivery may be actual or constructive, see OCGA § 44-5-82, but “[t]o be effective, delivery must be made during the donor’s lifetime.” Longstreet, 312 Ga. App. at 5 (2) (emphasis in original). See also Ansley v. Sunbelt Investments Realty, 176 Ga. App. 693, 695-696 (2) (337 SE2d 448) (1985).”
“Actual manual delivery is not essential to the validity of a gift. Any act which indicates a renunciation of dominion by the donor and the transfer of dominion to the donee shall constitute a constructive delivery.” OCGA § 44-5-82. See Smith v. Tibbits, 359 Ga. App. 362, 370-371 (2) (857 SE2d 820) (2021).
The Court of Appeals held there was some evidence of constructive delivery that would allow a jury to find the gift was complete. There was evidence that, given Rick Walsh’s physical condition at the time, he took every step he could to immediately and irrevocably transfer dominion of the gift to Alice Walsh. He arranged for the creation of the 529 accounts. He instructed Raymond James verbally to transfer the funds. Then, when told that he also needed to sign a letter of authorization, he did so. Unable to deliver that letter to Raymond James himself, he gave the letter to Alice Walsh, who as the owner of the accounts was effectively the donee, see OCGA § 20-3-634(b)(3) (noting that the owner of a 529 account has the power to redirect the funds in the account to other beneficiaries of the owner’s choice), thereby giving her the means to complete the delivery of the gift without any further action on his part. Finally, he expressed his desire that the transfer be completed immediately.
Because there was a factual dispute regarding delivery that would allow a jury to find for Mrs. Walsh, summary judgment was improperly granted and the case was reversed.
Hint: As a general rule, once you give something away, it’s not yours anymore.
