Do we have to repay financial gift?

return financial gift

A relative inherited a good deal of money and gifted a portion of that money to us to help us get into the house we are building. The money ran out before we were able to finish our house. The relative feels we mismanaged the gift of money and told us to get a good lawyer. There was no note or loan agreement. Does she have grounds to sue?

"A gift is a gift. It's yours to do with as you please with no strings attached," says estate planning attorney Greg Bonney. "If it was a loan to be repaid, that should have been clear up front." 

Bonney says that in order to show the court it was a loan, the lender would need to have something in writing
—?an agreement, a letter or even the word "loan" written in the memo section of a check—?indicating it was indeed a loan. Without anything in writing, the courts would consider the money a gift. 

Information provided by Johns, Flaherty & Collins. For more information on estate planning in Wisconsin, contact us at (608) 784-5678.

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