Many people use a Gift Affidavit when they are gifted something of value, such as a house, a boat, an artwork, or a plot of land, to name a few. The document affirms that the original owner transferred the gift ownership to you without accepting money in return.
Moreover, this document states that the gift in question was not a loan, and you did not give anything in exchange.
There are several reasons for using a Gift Affidavit. Perhaps someone has gifted you a house or a valuable artwork. People also get a Gift Affidavit if the gift in question requires a title transfer, such as a vehicle.
The Gift Affidavit affirms it was indeed a gift and not a loan, and you did not obtain it in exchange for money or favor.
Although you do not always need a Gift Affidavit, the document becomes useful if there is ever a need to prove you are the gift owner. In the event of a divorce or, more commonly, when you have to file taxes, this statement may come in handy.
Without a Gift Affidavit, the court may adjudge the asset as a loan or a way to avoid paying taxes, which can result in both parties getting charged with fraud.
Depending on your state, a Gift Affidavit may also be known as:
Any individual gifted a house, land lot, artwork, money, boat, or anything else of value should get a Gift Affidavit. In most cases, family members are the ones giving these gifts, but you should still consider getting a Gift Affidavit to prove a voluntary transfer of ownership. In most states, a Gift Affidavit or sales receipt is mandatory when a vehicle's ownership is transferred from one person before the vehicle can be registered to the new owner at the DMV.
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Creating a Gift Affidavit and protecting the asset received does not have to be a hassle, just so long as the document is accurate and thorough. Your best bet is to use the Gift Affidavit template on our website to generate your custom affidavit.
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Before signing the Gift Affidavit, review the statement to ensure everything is in order. Only the donor has to sign the document, though it is not uncommon for the donee to sign it, which has to be done in the presence of the notary public tasked with notarizing the document.
After both parties sign the statement, each should keep a copy of the document, especially the recipient. The affidavit can be used to prove the absence of tax liability (only up to the gift tax threshold in most cases) or that the asset was voluntarily given, as needed.
Generally speaking, Gift Affidavits are not required for donations, as the more applicable tool here is the gift receipt. Check with the organization if it can give you such a receipt, which most should be familiar with.
A court may demand to see a Gift Affidavit to prove that the donor voluntarily dispensed of the gift. In the event that a Gift Affidavit undeclares the value by a substantial amount, a court might hold the parties responsible for perjury and perhaps refer to the prosecutor for a fraud investigation.
When applying for a loan, you might be required to supply a Gift Affidavit such that the bank can be certain of your serviceability and your liabilities do not include the “alleged” donor.
After he or she signed the Gift Affidavit, the donor cannot go back and retrieve the sworn statement and therefore – no. Read the Gift Affidavit carefully and make sure that you understand the terms before you sign it.
Absolutely. With the transfer of ownership completed, a donee can do anything he or she wishes to do with the gift. They can keep and cherish the gift or sell or otherwise dispose of the gift in any fashion.
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