Validity and Expiration of a Deed of Donation in the Philippines

This article explains, in Philippine law, how donations work: when a deed of donation is valid, how (and if) it can “expire,” how it may be revoked or reduced, and the practical steps to keep a donation effective against third persons. It focuses on donations inter vivos—the most common “deed of donation”—and contrasts them with donations mortis causa.

1) What a “Deed of Donation” Is (and Isn’t)

A deed of donation is a juridical act where a donor gratuitously transfers ownership or a proprietary right to a donee, out of liberality, with the donee’s acceptance. It is typically inter vivos (effective during the donor’s lifetime once accepted). By contrast, a donation mortis causa is essentially testamentary—it takes effect at the donor’s death and must comply with the formalities of a will.

Key distinctions:

Inter vivos: Immediately effective upon proper acceptance; generally irrevocable, subject to specific grounds for revocation or reduction; follows the Civil Code rules on donations (capacity, form, acceptance).
Mortis causa: Effective only upon death; revocable like a will any time before death; must follow will formalities (including witnesses) and rules on succession.

2) Essential Requisites for Validity (Donations Inter Vivos)

A donation is valid if these legal requisites are met:

Capacity
- Donor must have capacity to dispose of property (generally, not a minor and not otherwise legally incapacitated).
- Donee must have capacity to accept (a conceived child may be a donee; juridical persons must be authorized by law and their charters).
- Restrictions: Donations between spouses during marriage (and between persons guilty of adultery/concubinage) are void, save for moderate gifts on family occasions (Family Code).
Cause & Object
- Cause is pure liberality (no consideration expected).
- Object must be within commerce, determinate or determinable, and owned by the donor.
- Future property (not yet existing or not yet owned) cannot be donated inter vivos.
Acceptance
- The donee must accept the donation during the lifetime of both donor and donee.
- Acceptance may be by the donee or an authorized representative.
Form
- Movables:
  - If of small value and there is simultaneous delivery, an oral donation may suffice.
  - Otherwise, a written instrument is required.
- Immovables (real property):
  - Must be in a public instrument (notarized deed), specifying the property and any charges/conditions.
  - Acceptance must appear in the same instrument or in a separate public instrument; if separate, the donor must be notified in authentic form (and this notification must be noted in both instruments). Failure to meet these acceptance-notification formalities invalidates the donation.
No Prohibited Conditions
- Conditions contrary to law, morals, or public policy are void; if the condition is illegal but not the principal cause, the condition is severed; if it’s the principal cause, the entire donation is void.
- Prohibitions on alienation beyond 20 years are void (a shorter restraint may be valid). The donor may impose charges (e.g., use as a school), but the donee must be able to comply.

3) When Ownership Transfers

For movables: upon delivery (which may be actual or constructive via the donation instrument).
For immovables: execution of a valid public instrument with proper acceptance already transfers ownership between the parties; registration with the Registry of Deeds is not a validity requirement, but it is crucial to bind third persons and to protect the donee’s title in the public registry.

4) Does a Deed of Donation “Expire”?

Strictly speaking, a valid deed of donation does not expire by lapse of time. However, a donation can lose efficacy or be defeated in several ways:

Suspensive/Resolutory Terms or Conditions
- The deed may set a term (e.g., donation effective on a date) or a resolutory condition (e.g., property reverts if not used for a specified purpose). Failure of a suspensive condition prevents the transfer; occurrence of a resolutory condition can resolve the donation.
Revocation (see Section 5)
- The donor may revoke for specified legal grounds (ingratitude, noncompliance with charges, supervening children, etc.), within prescriptive periods.
Reduction for Inofficiousness (see Section 6)
- After the donor’s death, compulsory heirs may reduce donations that impair the legitime. This does not mean the deed “expires,” but it can shrink or undo the donation to the extent of impairment.
Failure of Acceptance Formalities
- If acceptance is not properly made/notified while both are alive, the donation does not take effect.
Non-registration
- Not an “expiration,” but failure to register a real-property donation leaves the donee vulnerable to third-party claims (e.g., a later buyer in good faith and for value who registers first).

5) Revocation of Donations (Inter Vivos)

Donations inter vivos are generally irrevocable, except on specific legal grounds. The deed may also include express reversion clauses, which operate according to their terms (provided they are lawful).

A) For Noncompliance with Conditions/Charges

If the donation is onerous (imposes charges) or modal (imposes a purpose), substantial breach allows revocation. The donor must show noncompliance attributable to the donee.

B) For Ingratitude

Classically includes:

The donee commits an offense against the donor’s person or honor (e.g., serious crimes, grave insults).
The donee refuses support to the donor when legally obliged to give it.
Other acts defined by jurisprudence as ingrata persona (attempt on life, etc.).

Timing: The action for revocation must be brought within the period set by the Civil Code and jurisprudence (short and strict). It cannot be waived in advance and does not pass to the donor’s heirs if the donor did not file it within the period (save specific exceptions provided by law).

C) Supervening Children/Descendants

If a donor without children/descendants donates, and later has, adopts, or acknowledges a child, the law allows revocation to protect future heirs—subject to statutory requirements and time limits.

Effects of Revocation: Generally, the property returns to the donor (or his/her estate) free of the donee’s encumbrances if the donee acted in bad faith. If third persons acted in good faith (e.g., a mortgagee), rules on protection of third persons may limit recovery. Fruits and improvements are treated per equity and specific Civil Code rules.

6) Reduction for Inofficious Donations (Protection of the Legitime)

Even a perfectly valid donation may be reduced after the donor’s death if it impairs the legitime of compulsory heirs (e.g., spouse, legitimate/illegitimate children, parents—depending on the family constellation). Key points:

The reduction action belongs to compulsory heirs and is computed by fictitiously adding back donations to the free portion and estate at death.
Collation may be required for donations to heirs.
Prescription runs from death (the exact period is set by the Civil Code/jurisprudence). If not timely filed, the donation stands.

7) Donations Mortis Causa (for Contrast)

If a deed labeled “donation” is intended to be effective only upon death, reserves full control to the donor, or is revocable at will, it is likely mortis causa and must:

Observe the formalities of a will (e.g., notarial or holographic, proper witnesses).
Respect legitime.
Be probated after death before it can transfer title to real property.

Failure to follow will formalities typically renders the mortis causa disposition void.

8) Formalities Checklist (Immovables)

Public Instrument: Notarized deed describing the property and charges.
Acceptance: In the same deed or a separate notarized instrument.
Authentic Notification (if acceptance is separate): Donor must be formally notified; the fact of notification must be annotated.
Delivery: Execution of the deed suffices for constructive delivery.
Registration: Present to Registry of Deeds with supporting tax clearances to transfer title; without registration, the deed binds the parties but not third persons.

9) Taxes, Fees, and Compliance (Practical, Not Validity Per Se)

While taxes don’t usually determine validity between the parties, they are essential to register transfers and to avoid penalties:

Donor’s Tax: As a general rule under current tax law, net gifts exceeding the annual exemption are subject to donor’s tax, commonly at a 6% rate (subject to exemptions, special donees like accredited NGOs, and evolving rules). Filing/payment timelines are short (traditionally within 30 days from the date of donation), with documentary requirements (IDs, deed, valuations).
DST & Local Transfer Taxes: Documentary Stamp Tax and local transfer taxes may apply.
Real Property: Requires BIR clearance (CAR/eCAR), zonal/fair market value determinations, and payment of registration fees at the Registry of Deeds and assessor’s annotation/issuance of new tax declaration.

Always verify current tax rules, rates, and deadlines before filing; these are subject to change and may have special exemptions.

10) Common Pitfalls (and How to Avoid Them)

Missing Acceptance Formalities (especially for real property): ensure donee’s acceptance and authentic notification if separate.
Mislabeling Inter Vivos vs Mortis Causa: If control is retained until death or revocation is unfettered, comply with will formalities.
Ignoring the Legitime: Large lifetime donations may be reduced later; plan with the free portion in mind.
Overbroad Non-Alienation Clauses: Limit to ≤ 20 years if imposing restraints on alienation.
Skipping Registration: Register real-property donations to protect against third-party claimants.
Donations Between Spouses (during marriage) or with prohibited relationships: generally void—use appropriate estate or property regime planning.
Conditions the Donee Cannot Perform: If the donation is modal, ensure the donee can realistically comply to avoid revocation.

11) Quick Reference: Does It “Expire”?

No automatic expiration by time if validly made and accepted.
It can fail to take effect (no timely acceptance or improper form), be resolved (condition occurs), be revoked (ingratitude, noncompliance, supervening heirs), be reduced (inofficiousness), or be defeated by third parties if unregistered.

12) Practical Steps for a Solid Donation (Real Property)

Draft a public instrument that precisely describes the property and any charges/conditions.
Ensure donee acceptance in the deed; if separate, prepare a separate notarized acceptance, serve authentic notice to the donor, and annotate the notice in both deeds.
Prepare tax filings (donor’s tax, DST, local taxes) and secure BIR CAR/eCAR.
Register with the Registry of Deeds and update the assessor’s records.
If imposing restraints or modes, keep them lawful and time-bounded (≤ 20 years for non-alienation).
Keep records of delivery, acceptance, notice, and registration.

Final Note

This is a high-level synthesis of core Philippine legal rules on donations. Edge cases (trusts, charitable donations, public property, mixed onerous/gratuitous deeds, split interests, donor’s bankruptcy, tax-exempt donees) follow special laws or jurisprudence. For significant gifts—especially real property or large movables—have a Philippine counsel review capacity, formalities, legitime exposure, tax compliance, and registration strategy.