Q: Do we HAVE to payback a gift with no documentation?
My MIL offered us money to buy a house. She paid for it, and had us leave her out of all documentation. Then, tells us she took a mortgage out on her own home to give us the money, and wants us to pay it back. We felt trapped and paid payments. Now she is talking about “pulling our house” because we were talking about a divorce. She threatened me saying that if I left my husband she would find a way to take my home. Do we have to pay her? There is literally no documentation proving we owe her and she insisted to stay off of all of the paperwork to avoid taxes and stuff. She is using the house like leverage and even though we are working it out I feel trapped and unsure what power she has over us.
Additional detail- there is no mortgage on our house, it’s fully in my husband’s name. The only mortgage is on her house in her name.
She chooses to threaten us when she doesn’t get “enough time” with our kids too. It feels like extortion.
A: She could sue for the money back but since there's no mortgage on the property she wouldn't be able to foreclose. She would have to get a judgement first and then try to seize property.
I would gather any documentation that shows the money was a gift or communications where no mention of a loan or repayment occurred and just be ready for a suit.
If she paid directly you may have issues with constructive ownership and if you made a series of substantially equal payments it may lend credence to the argument that the amounts were a loan.
It's ultimately going to come down to was it a gift or a loan.
From a tax perspective it doesn't matter for your end unless you're trying to deduct the interest. If it does get recharacterized as a loan she'll have some tax issues, failing to issue a 1098, not including interest in income, etc...
A: If this was a gift, you do not have to repay it. If it was agreed to be a loan, she is entitled to seek repayment. But, even if it is a loan, it is not secured by a mortgage on the house and although she has remedies available, those remedies do not include "pulling" your house. If you applied for a mortgage to finance the house, was there a 'gift letter' provided to the lender?
After writing this I see that Mr. Blackburn gave the same answer. I agree with his answer.
Bruce Alexander Minnick agrees with this answer
1 user found this answer helpful
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.