A brother signed an irrevocable power of attorney and forms for the transfer of real estate rights, which he inherited from his father, to his sister in a gift transaction. The siblings reported the transaction to the tax authorities as required by law, however, the rights were never recorded at the Land Registry in the sister's name. Subsequently, the brother contended that he had notified the lawyer of the cancellation of the transaction.
The Court determined that the transfer of ownership to the sister is valid. Israeli law defines a gift transaction as the transfer of ownership of an asset (real estate, chattels, or rights) from one person to another without any consideration. In transactions of this type, there is a writing requirement, which mandates a document of commitment and a clear identification of the parties, the asset, and the nature of the transaction as a gift. The writing requirement is also fulfilled through the execution of affidavits, a power of attorney, and tax forms, and there is no need for a formal contract. Additionally, executing an irrevocable power of attorney indicates a waiver by the donor of their right to revoke their commitment. As a rule, as long as the recipient of the gift has not changed their position in reliance upon it, the donor is permitted to retract it, unless they waived this right in writing. The exceptions to this are situations of disgraceful conduct by the recipient of the gift toward the donor or their family members, or a significant deterioration in the donor's economic situation. In our case, a gift affidavit was submitted on behalf of the brother, clearly detailing the identity of the parties, the asset, and the lack of consideration. The brother explicitly declared that he could not retract the gift and even signed an irrevocable power of attorney. Furthermore, the sister did not receive any notice regarding the cancellation of the gift and the cancellation was not even reported to the tax authorities. As there was no deterioration in the brother's economic situation and no disgraceful conduct on the part of the sister , the gift transaction is valid.