OF GIFTSCentral

Section 128 of The Transfer of Property Act, 1882

Subject to the provisions of section 127, where a gift consists of the donor's whole property, the done is personally liable for all the debts due by 1[and liabilities of] the donor at the time of the gift to the extent of the property comprised therein.

Summary

A universal donee is a receiver who is given the entire property and assets of a giver.
This transfer is subject to the rules on burdened gifts in Section 127.
A universal receiver is personally responsible for paying off all of the giver's debts and liabilities that existed at the time of the gift.
The receiver's personal liability is strictly capped at the total value of the gifted property they received.

Practical examples

1Kevin decides to retire from public life and gifts his entire estate, including his house, savings, and vehicle, to his daughter, Lisa. At the time of the gift, Kevin owes fifty thousand dollars to a bank. Lisa is now personally liable to pay back Kevin's bank debt, but only up to the total value of the estate Kevin gifted her.

2Mark gifts all his worldly possessions to his close friend, Nancy. Nancy discovers that Mark has outstanding tax debts of eighty thousand dollars, but the total value of the property Nancy received is only sixty thousand dollars. Nancy is personally liable to pay the tax debt, but her liability is strictly capped at sixty thousand dollars.

FAQ

1. Who is a universal donee under Section 128 of the Transfer of Property Act, 1882?

Under Section 128 of the Transfer of Property Act, 1882, a universal donee is a person who receives a gift consisting of the giver's entire property.

2. Is a universal donee liable for the giver's debts under the 1882 property Act, Section 128?

Yes, under Section 128 of the Transfer of Property Act, 1882, the universal donee is personally liable for all the debts and liabilities of the giver that existed at the time of the gift.

3. What is the limit of a universal donee's liability under Section 128 of the Transfer of Property Act, 1882?

Under Section 128 of the Transfer of Property Act, 1882, the universal donee's personal liability is strictly limited to the extent or value of the property contained in the gift.

4. Does Section 128 of the Transfer of Property Act, 1882, cover future debts of the giver?

No, Section 128 of the Transfer of Property Act, 1882, only makes the universal donee liable for debts and liabilities of the giver that were due at the time of the gift, not debts incurred after the gift is made.

Test yourself

Q1.Under Section 128 of the Transfer of Property Act, 1882, to what extent is a universal donee personally liable for the debts of the donor?

Q2.Under Section 128 of the Transfer of Property Act, 1882, does a universal donee become liable for debts that the donor incurs after the gift has been completed?

Q3.Under Section 128 of the Transfer of Property Act, 1882, how does the opening phrase "Subject to the provisions of section 127" affect a universal donee who is a minor?

Q4.Under Section 128 of the Transfer of Property Act, 1882, what comprises the gift that triggers the status of a "universal donee"?

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