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Simple English definitions for legal terms
illusory-transfer doctrine
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A quick definition of illusory-transfer doctrine:
Term: Illusory-Transfer Doctrine
Definition: The illusory-transfer doctrine is a rule in the law that disregards a gift made during a person's lifetime if the donor still retains too much control over the transferred property. This means that if the donor did not have a genuine intention to give away the property, the law will not recognize the transfer. This rule is usually applied to trusts where the person who created the trust still has too much power over it, such as the power to revoke the trust or control the income from it. The leading case on this doctrine is Newman v. Dore, 9 N.E.2d 966 (N.Y. 1937).
A more thorough explanation:
The illusory-transfer doctrine is a legal rule that states that an inter vivos gift (a gift made during the giver's lifetime) will not be recognized if the giver retains too much control over the transferred property. This means that if the giver does not have a genuine intention to give away the property, the law will not consider it a valid gift.
For example, if someone creates a trust and retains the power to revoke it, receive income from it, and make all the decisions about how the trust property is managed, the trust may be considered an illusory transfer. This is because the giver has not truly given up control over the property.
The leading case on the illusory-transfer doctrine is Newman v. Dore, a 1937 case from New York.
Another example of an illusory transfer might be if someone gives a car to a friend but continues to use it as if it were still their own. In this case, the law would not recognize the gift as a valid transfer of ownership.