How do you keep control of your gift?
When you gift, you usually no longer have control or authority over what you've given away. In principle, the person receiving the gift can do what they like with it, but what if you would like to stay in control of your gift?
Gifting with conditions
Subject to usufruct (requires a notary public)
If you give a gift subject to usufruct, the beneficiary will only receive bare ownership. The right to use and benefit from the gift will remain yours as usufructuary. This means you could keep living in a gifted property, or keep controlling a gifted portfolio and collecting the proceeds it generates.
Ban on sale
Are you concerned that your nephew will buy an expensive car with your gifted money? When gifting, you can stipulate that the beneficiary cannot sell or give away the gift. This clause is only valid if it is in your interest (e.g., because you still have usufruct) and time-limited (e.g., as long as you live).
Right of reversion clause
If you would you prefer your gift not to pass to the beneficiary's heirs upon their death, you can include an (optional) right of reversion clause in the deed of gift. This means that the gift (or whatever has replaced it) will revert to you upon the beneficiary's death. In principle, this reversion is tax-free.
Please note:
Always use a notary public when gifting:
- immovable assets (real estate)
- movable assets subject to usufruct
Other conditions can be included in a inter vivos gift via the bank.
Opting for a controlled transfer of assets
Would you like to make a gift of money with unrestricted ownership, but want to prevent the beneficiary from using the gifted money without your permission?
Should the gifted amount definitely return to you if the beneficiary dies before you? If so, a controlled transfer of assets can present a solution.
In the first phase, you gift money to a beneficiary such as your child with an inter vivos gift via the bank. This gift includes a right of reversion clause so that the gifted money will return to you should they die before you.
In the second phase, your child takes out endowment or investment-type insurance with the gifted money. Your child designates you, the giver, as the beneficiary for the gifted amount. Afterwards, your child can no longer change the beneficiary designation or surrender the insurance without your consent.
Please note:
You child can still decide freely on the capital gain realised on the policy and withdraw this gain without your consent, e.g., surrender.
As giver, you will no longer be able to personally control the gifted assets. The beneficiary can, for example, choose to switch funds within the same insurance contract. If you don't want that, you're better off gifting with a different method (e.g., subject to usufruct).
Combining the gift with the establishment of a partnership
If you want to gift to your child while retaining some form of control over the gifted assets, you can also combine the gift with a partnership.
This can be a solution if your knowledge and experience is required, or if your child shows little interest in managing the gifted assets.
There are two possibilities:
- You give a gift first (via notarial deed or inter vivos gift via the bank). You then set up the partnership with the beneficiary, after which the beneficiary brings the gifted assets into the partnership.As giver, you also make a limited contribution. In exchange for this contribution, all parties receive a number of shares in accordance with their contribution.
- You set up the partnership first. You receive shares in the partnership, most of which you gift to the beneficiary (this requires a notarial deed).In the Articles of Association, you can lay down a number of rules to ensure that you can maintain control. You can also attach conditions to the gift itself, as discussed above.
Please note:
A partnership is an interesting planning technique for larger assets. If you would like to set up a partnership and draw up Articles of Association, it is best to call on the services of a notary public, lawyer or accountant, who can ensure that everything is done according to the applicable tax and legal rules.