A Gift Affidavit is a legal document that provides formal proof of the transfer of ownership of property as a gift by one party (Donor) to another party (Donee).
What is a Gift Affidavit?
A Gift Affidavit is a legal document used to prove that an item was given to someone as a gift. In a Gift Affidavit form, the person giving the gift (known as the “donor”) swears that an item is being gifted to the recipient (known as the “donee”) and that no payment is expected in return.
Gift Affidavits are most commonly used when giving someone an expensive item as a gift, such as a car, and legal proof is required to transfer ownership.
When the item has significant value or requires a title or deed transfer, the Gift Affidavit clearly:
- States the gifting intention of the gift-giver
- Documents that this process was not a loan or sale
- Declares that the gift-giver exchanged no other object of value for the item.
Depending on the item, you may have to state that it is a gift for state or federal reasons. It can be for tax, registration, or other purposes. Common terms used in a Gift Affidavit include:
- Gift Giver/Donor. The owner of the item that will be gifted to another person.
- Gift. A description of the gift.
- Value. The specific amount of cash given, or the estimated or appraised value of the gift.
- Recipient/Donee. The person receiving the gift.
- Notary Public. The person who verifies the affidavit
As a reference, this document may also be referred to as:
- Affidavit of Gift
- Gift Affidavit Form
- Gift Letter
- Gift Deed
Types of Gift Deeds
A Gift Deed or Gift Affidavit can be either:
- Revocable – the donor can cancel the gift anytime before giving the gift to the recipient. However, once the donor gives the gift to the donee, the donor will no longer be able to take it back.
- Irrevocable – after the donor executes the Gift Deed, they are legally obligated to give the gift to the recipient.
When To Get a Gift Affidavit
A Gift Affidavit is needed when a donor voluntarily bestows a valuable item to someone else. It is often used when gifting a car or a significant amount of money to another person, usually a family member. The affidavit documents that a donor acted voluntarily when giving the item. Gift Affidavits also prove that the gift was not a loan, and the donor cannot demand its return, payments, or compensation.
Property
Certain life events such as getting married can have legal implications on the ownership of your property. For example, if you’ve been gifted an item of significant value while you are married, you would need a Gift Affidavit to prove that it is not joint property. In the event of a divorce, the Gift Affidavit ensures that the property remains with you.
Gifting a Car
When a car is being transferred from one person to another for no payment, or an amount significantly less than the car’s value, they need a Car Gift Affidavit. Many states require this document for that purpose, although it can go by other names:
- Car Gift Form
- Affidavit of Motor Vehicle Gift Transfer
Gifting Cash
You also need to use a Gift Affidavit as cash gifting proof. If someone challenges the monetary gift and says it was a trust or loan, you can use this document to prove that the money was intended as a gift. For example, let’s say you’re interested in buying a house.
As part of the underwriting process, a lender such as a bank will have to assess your eligibility for a loan before they can give you a mortgage. If you’ve recently received a large sum of money as a gift, you may have to prove to the lender that the recent influx of cash isn’t due to you taking on another loan for the down payment.
A Gift Affidavit would be able to prove that the sum is a gift and give the lender more confidence that you’ll be able to pay the loan back.
Consequences of Not Using a Gift Affidavit
Without a Gift Affidavit, you may be required to prove that the cash or assets were, in fact, a gift, or you will pay taxes on these items. For example, the person receiving a car as a gift will be required to pay taxes on it as if it were purchased unless there is a valid Gift Affidavit. Gifts of cash or assets of up to $16,000 per person per year are exempt from federal taxes [1] .
Additionally, the gift could be potentially classified as a loan or sale, which have their own set of legal implications. The same could be said when gifting large amounts of cash for educational and other purposes. They can trigger complicated tax laws, so it is a good idea to seek legal, financial, and estate planning expert advice before doing so. The same could be said when gifting large amounts of cash for educational and other purposes.
How To Write a Gift Letter
Step 1 – Fill in your basic details
You must include your personal information such as your:
- Name
- Date of Birth
- Address
- Telephone Number
- Social Security Number (SSN)
- Governing State
Providing this information helps the necessary parties in identifying you. Federal or state officials particularly use your SSN for tax-related purposes.
Step 2 – Fill in the details of the donor
You must provide the following details of the “donee’”, i.e. the person you’re donating a gift to:
- Name
- Address
Step 3 – Provide details of the gift
Write down the description of the gift and include any other relevant documents. For example, if you’re gifting a car, you should include:
- Its make
- Its model
- The vehicle identification number (VIN)
- Its value
- Title number
- Whether the donor will receive payment, and if so, details of that payment
- Details of any remaining debts attached to the vehicle and if the donee will assume those debts
You should also include the car’s title as an exhibit.
Step 4 – Sign the document
Both the donor and the donee should sign the document.
Step 5 – Notarize the document (optional)
While it is not required that you sign the affidavit in front of a notary, having the affidavit notarized will help verify the authenticity of the affidavit should there be a dispute down the line.
What Should Be Included in a Gift Affidavit?
A Gift Affidavit is a simple, straightforward document. At a minimum, it should include:
- Donor Information and Address. The donor’s identification details, including their address, birth date, and social security number.
- Statement of Gift. A statement clearly stating that the item is voluntarily given.
- Recipient Information. The recipient identification information. It may include the person’s legal relationship to the donor but it is not required.
- Gift Description. A description of the gift, what it is worth, and when it is given. If the gift is a motor vehicle, you should include the vehicle identification number (VIN) in the gift description.
- Notary Details. The person in charge of administering the affirmations and oaths of the donor.
Gift Affidavit Templates (Word & PDF)
While a general Gift Affidavit can be customized to be used for any item, you may want to download and use one of the specific gift affidavit templates below to save yourself time:
- Affidavit of Gift – Income: Word (.docx) or Adobe PDF
- Affidavit of Gift – Motor vehicle: Word (.docx) or Adobe PDF
- Affidavit of Gift – Real property: Word (.docx) or Adobe PDF
- Affidavit of Gift – Securities: Word (.docx) or Adobe PDF
- Affidavit of Gift – Others: Word (.docx) or Adobe PDF
Gift Affidavit Frequently Asked Questions
Is a Deed of Gift a Legal Document?
Yes, a Deed of Gift is a legal document. This means that gifts are generally irrevocable once they are signed and executed.
Does a Gift Deed Need To Be Notarized?
Yes, a Gift Deed must be notarized. Notarization will verify your identity and that you are giving the gift without being coerced.
Can a Gift Deed Be Canceled?
A donor can cancel a Gift Deed if the gift is considered a “gift causa mortis,” or a gift made based on the donor’s contemplation of death. The giver can revoke these gifts at any time. They may also be revoked if the giver no longer believes they are going to die soon. For example, they can revoke the gift if they escape from the danger under which the gift was made or recover from illness.
Can Someone Gift an Item to a Person on My Behalf?
Yes, someone else can gift items on your behalf. However, if the gift is of significant value such as a large monetary sum, that person will need to have Special Power of Attorney for the gift deed. This grants another person the power to perform legal actions on your behalf. Although this is only advised if you trust the person to act in your best interests.