A Louisiana act of donation of immovable property must be executed as an authentic act before a notary public and two witnesses, then recorded in the conveyance records of the parish where the property sits. Skip either step and the transfer is either void outright or unenforceable against third parties. The formalities are unforgiving, and the planning issues around them, forced heirship, existing mortgages, federal gift tax basis, and Medicaid eligibility, decide more disputes than the signing ceremony ever does.
The Authentic Act Is the Core Requirement
A donation of immovable property made without an authentic act is an absolute nullity. Louisiana law treats the transfer as if it never happened, and no court will paper over the defect.1Louisiana State Legislature. HB NO. 527 (Original) – Relating to Donations
An authentic act is a written document signed by the donor, the donee, two witnesses, and a notary public, all in each other’s presence.2FindLaw. Louisiana Civil Code Tit III Art 1833 – Authentic Act The document must describe the property clearly and state that the donor is transferring ownership without compensation.
Both parties need legal capacity. The donor has to understand the nature and consequences of the donation.3Justia Law. Louisiana Civil Code Article 1477 – Capacity to Donate, Mental Condition of Donor The donee must accept the donation during the donor’s lifetime; if the donee dies before accepting, their heirs cannot accept on their behalf.1Louisiana State Legislature. HB NO. 527 (Original) – Relating to Donations
Recording in the Parish Conveyance Records
Once signed, the act must be filed in the conveyance records of the parish where the property is located. Until it is recorded, the donation has no effect against third parties, meaning a later buyer or a creditor of the donor who has no knowledge of the donation can claim rights that override the donee’s.4Louisiana State Legislature. Louisiana Civil Code Art 1839 – Transfer of Immovable Property
Between donor and donee, the donation is effective once accepted. But recording is what makes ownership visible to the outside world, and recording fees are modest compared to what an unrecorded donation can cost when a third-party claim surfaces.
Steps to Complete the Donation
The practical sequence looks like this:
- Run a title search to confirm clear ownership and identify any mortgages, liens, or servitudes.
- Obtain a qualified appraisal close to the date of donation. Fair market value is needed for the federal gift tax return and for any future Medicaid penalty calculation.
- Have an attorney familiar with Louisiana property law draft the authentic act, including any language on collation, conditions, or retained usufruct.
- Sign before a notary with two witnesses, all present at the same time.
- File the executed act in the parish conveyance records.
The donee should also consider a new owner’s title insurance policy, because the donor’s existing policy does not carry over to a recipient who took by donation.
What to Address Inside the Act
Several drafting decisions have consequences that outlast the donor:
Collation language. If the donee is also an heir of the donor, Louisiana’s default rule treats the donation as an advance on the heir’s eventual share. The donated property is added back into the estate at succession, and the heir’s share is reduced by the value already received.5Justia Law. Louisiana Civil Code Article 1227 – Collation, Definition If the donor wants the donation treated as a true gift from the disposable portion, the authentic act needs to say so explicitly.
Conditions and charges. Any obligation the donor wants to impose, keeping the property as a family home, paying taxes, letting the donor continue to live there, must appear in the act itself. Oral side agreements carry no legal weight.
Retained usufruct. A donor who wants to keep using the property during their lifetime can reserve a usufruct in the same act. This is common in Louisiana estate planning and affects the gift tax valuation of the donation.
Mortgages, Liens, and the Due-on-Sale Clause
Donating property that still carries a mortgage is legally possible and practically dangerous. Most residential mortgages include a due-on-sale clause letting the lender demand the full remaining balance when ownership changes.6Fannie Mae. Enforcing the Due-on-Sale (or Due-on-Transfer) Provision
Federal law carves out an exemption. Under the Garn-St. Germain Act, a lender cannot enforce the due-on-sale clause when the borrower transfers the property to a spouse or child, or into a trust where the borrower remains a beneficiary.7Office of the Law Revision Counsel. 12 U.S. Code 1701j-3 – Preemption of Due-on-Sale Prohibitions A donation to a sibling, parent, friend, or unrelated person does not qualify, and it can trigger the full balance.
Federal tax liens survive the transfer. A federal tax lien attaches to all of the taxpayer’s property, and donating does not remove it; the IRS can pursue the property in the donee’s hands. Clearing the lien from a specific property before the donation requires a certificate of discharge from the IRS.8Internal Revenue Service. Understanding a Federal Tax Lien
Forced Heirship Limits on What You Can Give
Louisiana is the only state with forced heirship rules, and they cap how much you can donate. Forced heirs are children who have not yet reached age 24, and children of any age who are permanently unable to care for themselves due to mental incapacity or physical infirmity.9Justia Law. Louisiana Civil Code Article 1493 – Forced Heirs
With one forced heir, the forced portion is one-quarter of the estate. With two or more, it is one-half.10Justia Law. Louisiana Civil Code Article 1495 – Amount of Forced Portion and Disposable Portion Only the remainder, the disposable portion, is freely donatable. A donation that impinges on the forced portion can be reduced or unwound by the forced heir after the donor’s death.
Federal Gift Tax and the Basis Problem
Louisiana repealed its state gift tax in 2008, so no state gift tax applies.11Louisiana House of Representatives. Louisiana’s Gift, Inheritance and Estate Taxes Federal rules still do.
The 2026 annual gift tax exclusion is $19,000 per recipient, or $38,000 for a married couple electing gift splitting.12Internal Revenue Service. Frequently Asked Questions on Gift Taxes Most real property is worth well above that, so the donor will almost always need to file Form 709. Filing does not usually mean paying. Any amount above the annual exclusion reduces the donor’s lifetime exemption, which is $15 million per person in 2026 following the One, Big, Beautiful Bill signed into law on July 4, 2025.13Internal Revenue Service. What’s New – Estate and Gift Tax
The larger tax issue is basis. When property is donated during life, the donee takes the donor’s original cost basis.14Internal Revenue Service. Property Basis, Sale of Home, Etc. A house bought for $80,000 and worth $350,000 today passes with an $80,000 basis, exposing the donee to roughly $270,000 in gain when they sell. Property that passes at death instead gets a stepped-up basis equal to fair market value on the date of death, which wipes out that appreciation for capital gains purposes. For highly appreciated Louisiana property, this is often the deciding factor in whether to donate now or hold until death.
The Medicaid Five-Year Look-Back
Donating property can disqualify the donor from Medicaid long-term care benefits. Federal law imposes a 60-month look-back: any transfer for less than fair market value in the five years before a Medicaid application is scrutinized, and a donation of real property fits squarely inside that rule.
The penalty is calculated by dividing the value of the donated property by the average monthly cost of private nursing home care. Louisiana’s most recently published penalty divisor is about $7,200 per month, so donating a $216,000 property produces roughly a 30-month period of ineligibility. The penalty clock does not start on the date of the donation; it starts when the person applies for Medicaid and would otherwise qualify, which is why late-in-life donations can be devastating.
Limited exceptions exist, including transfers to a spouse or to a child who is blind or disabled. Anyone who might need long-term care within five years should think hard before signing.
Undoing a Donation After It Is Made
A donation between living persons is defined by law as an irrevocable, present divestment of the property.15Justia Law. Louisiana Civil Code Article 1468 – Donations Inter Vivos, Definition Revocation or dissolution is possible only in narrow situations.16Justia Law. Louisiana Civil Code Article 1556 – Causes for Revocation or Dissolution
Ingratitude is limited to two grounds: the donee attempted the donor’s life, or the donee committed cruel treatment, crimes, or grievous injuries against the donor.17Justia Law. Louisiana Civil Code Article 1557 – Revocation for Ingratitude Everyday ingratitude or a family falling-out does not qualify, and enforcement requires a lawsuit.
A donation subject to conditions or charges can be dissolved when the donee fails to perform. If the act required the donee to keep the property as a family home and the donee sells it, the donor can sue for dissolution. Modifying the terms of a completed donation requires a new authentic act with both parties’ consent, following the same formalities as the original.