David E. Ross, his two brothers, and their families operated and owned the entire stock of five businesses. Ross had three children:
Rod, David II, and Betsy. David II and Betsy were not involved in the operation of the companies, but Rod began working for one of the firms, Equitable Life and Casualty Insurance Company, in 2004. Between 2006 and 2010, the elder Ross informed a number of persons of his desire to reward Rod for his work with Equitable Life by giving him stock in addition to the stock he would inherit. He subsequently executed several stock transfers to Rod, representing shares in various family businesses, which were reflected by appropriate entries on the corporate books. Certificates were issued in Rod’s name and placed in an envelope identified with the name Rod Ross, but they were kept with the other family stock certificates in an office safe to which Rod did not have access. In all, one fourth of the stock holdings of David E. Ross were transferred to Rod in this manner. This fact is consistent with the elder Ross’s expressed intention that Rod should ultimately receive a total of one-half of the stock upon his father’s death. David E. died in April 2010. His will divided the estate equally among the three children and made no reference to prior gifts of stock to Rod.
David II and Betsy brought an action contesting the validity of the stock transfers. Are the inter vivos gifts of the stock valid? Explain.