Q: Can I use inherited money to help daughter's mortgage in CA?
I am inheriting money and would like to help my daughter by putting money towards her mortgage. However, my sister mentioned that someone in financial aid said I might not be able to gift my money away. Are there legal restrictions that could prevent me from using my inheritance to assist my daughter with her mortgage?
A: This is a tax question. Gifts of cash can trigger a gift tax and require the filing of a gift tax return according to the IRS website. One possibly end around may be for the inheritance to pass directly through to your daughter. I would consult with a tax adviser and the estate attorney regarding these options. Best of luck with this.
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A:
You can absolutely use your inherited money to help your daughter with her mortgage in California. Your sister's concern might stem from rules about financial aid for education, which are different from using inheritance for mortgage assistance.
In California, you're allowed to gift up to $18,000 per person annually without triggering federal gift tax reporting requirements (as of 2025). If you're married, you and your spouse can combine this for $36,000. Even if you give more, you'll just need to report it on your taxes - it won't prevent you from making the gift. This falls under your lifetime gift tax exemption, which is quite substantial.
The main consideration is documenting the gift properly for your daughter's mortgage lender. You'll need to write a gift letter stating the money is a gift with no repayment expected. It's wise to keep clear records of the inheritance and gift for tax purposes. Consider consulting with your tax advisor about the best way to structure this gift to minimize any tax implications while helping your daughter achieve her homeownership goals.
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