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.
1. What is a Gift Affidavit?
A Gift Affidavit is a formal way of recording something was given to another person as a gift. The affidavit is a sworn legal statement affirming a valuable item was voluntarily transferred from one person to another as a present. For example, the gift given could be a car, boat, land, house, or money.
Typically, a gift affidavit is required when the gift has significant value or requires a title or deed transfer to complete the change in ownership. The purpose of a gift affidavit is to clearly state the intention of the gift giver, to document that this process was not a loan or sale, and declare that no other value was exchanged for the item.
Depending on the item given, the designation of a gift may also be relevant at a state or federal level for taxation, registration, and other purposes. Common terms used in a gift affidavit include:
- Gift Giver: the person who owns the item or cash, and then gives it to another person.
- Donor: another name for the gift giver.
- Gift: a description of the gift.
- Value: the specific amount of cash given, or the estimated or appraised value of the gift.
- Recipient: the person receiving the gift.
- Notary Public: the person before whom the affidavit is sworn and signed.
A gift affidavit is not usually necessary when giving a person birthday, holiday, wedding, and baby gifts, or in other typical gift-giving situations.
As a reference, this document may also be referred to as:
- Affidavit of Gift
- Gift Affidavit Form
Gift Affidavit PDF Sample
This sample gift affidavit below is a record of the transfer of a gift from a fictional “Yanine Horowitz” to “Waverly Knight.” The affidavit details what the gift was, as well as when it was delivered: Sample PDF.
2. When a Gift Affidavit is Needed
A gift affidavit is needed when a donor voluntarily gives a valuable item to someone else. It is most often used when gifting a car or a significant amount of cash to another person, usually a family member. It documents that a donor acted voluntarily when giving the item and was not forced in any way to do so. Gift affidavits also serve as proof that the gift was not a loan, and therefore the giver cannot demand its return, any payments, or other compensation.
Many states require a gift affidavit when a car is being transferred from one person to another for no payment, or for an amount significantly less than the value of the car. In these situations, a downloadable form can be found on the state’s Department of Revenue web page. A bank may also require a gift affidavit to document how a buyer is financing the down payment of a home. The lender must know if this money will need to be repaid, and is therefore part of the buyer’s debt load, or if it is a gift that requires no repayment.
Depending on the lender, there are limits on who can give the buyer cash for the down payment and appropriate rules must be followed. A gift affidavit may also be used in a divorce to prove what is, and is not, jointly owned property.
A cash gift can never be used as a down payment to purchase an investment property and only conventional lenders will allow it to be used as a down payment on a vacation property.
3. Consequences of Not Having a Gift Affidavit
The consequences of not having a gift affidavit will depend on the type of gift given. 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 $14,000 per person per year are exempt from federal taxes.
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. Additionally, the gift could be potentially classified as a loan or sale.
Gifting large amounts of cash for educational and other purposes triggers complicated tax laws, so it is a good idea to seek legal, financial, and/or estate planning expert advice before doing so.
4. Most Common Uses for Gift Affidavits
The two most common situations for using a gift affidavit are:
- When transferring the title of a car to a family member as a gift, or
- Giving a member of the family money to use for the down payment of a home.
In both situations, if it is proven the assets were given as a loan instead of a gift, and the gift affidavit was used solely to avoid taxes, both the donor and recipient could be charged with fraud and may face prosecution.
You don’t need a gift affidavit when making a cash or other donation to a charitable organization. You will want a document from the charity acknowledging the gift, but an affidavit is not required or typically used in this situation.
5. What Should be Included in a Gift Affidavit
A gift affidavit is a simple and straightforward document. At a minimum, it should include:
- Donor information and address: the donor identification details, including their address, including the state and county.
- 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 what the gift is, what it is worth and when it is given. If the gift is a motor vehicle, the VIN should be included in the gift description.
- Notary details: the person in charge of administering the affirmations and oaths of the donor.
6. 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: