Property or Money Transfer Litigation

District of Columbia gift law dispute lawyers are crucial if you engage in individuals loan, gift, or transfer small to large sums of money, assets, or property to friends, partners, girlfriends, boyfriends, fiancés, family, or relatives for various reasons, including:

  • Loan or Gift for a home or asset purchase
  • Loan or Gift to fund business operations
  • Gift or Loan for investment purposes
  • Loan or Gift to repay debt
  • Loan or Gift for education
  • Gift or Loan for Tax Planning or Tax Avoidance, or Estate Planning
  • Loan or Gift to purchase, maintain, repair, or renovate property

These loans, gifts, or transfers are often made without legal advice. Thus, the parties typically do not prepare documentation that states the purpose of the transfer and if the transfer is considered a gift or loan. Furthermore, if the parties do prepare documents and if they did not receive legal advice, the documents may not reflect the true intentions of one or both of the parties.

When transferring money or other assets between family members or close friends, the correct description of the transaction may seem unimportant. Thus, the parties may not discuss or state whether the money needs to be repaid eventually. By not discussing this critical portion of the transfer process, disputes can arise concerning whether the transfer was a loan or gift after a divorce or if something happens that causes the two parties to not associate with each other.

If this occurs, legal advice is vital to determine if the transfer was a gift or loan. Furthermore, it may be necessary to utilize traditional litigation or a form of alternative dispute resolution to settle the issue.

Gifts Versus Loans

The legal definition of a gift is that this transfer of money or property does not have to be repaid. Typically, a lawyer will look at emails, correspondence or other documents, or perhaps by the absence of evidence of security, records, repayments or timely efforts to collect repayments to determine if the transfer was intended to be a gift.

A loan on the other hand is a process that involves a formal and recorded transfer in which the terms of the agreement are set out and in which repayments are made or sought. However, in cases where a loan is done between family members or close friends, the intention to make a loan can also be reflected in emails, correspondence or other documents, and by the existence of security, records, repayments or by evidence of timely efforts to collect repayments.

Facts to Consider

When a dispute arises regarding whether a transfer of money or assets is a gift or a loan, the recipient of the assets is the one that must prove that the transfer was a gift while the person transferring the money must prove that the transfer was a loan.

Dispute resolution by lawyers, mediators, arbitrators, or the Court will require the consideration of a number of factors to determine whether the transfer of money, assets, or property was intended to be a gift or a loan, including:

  • The nature of the relationship between the parties
  • The size of the gift as measured against the totality of the donor’s property
  • The importance of the gifted item in relation to the totality
  • Whether there were any contemporaneous documents evidencing a loan
  • If the manner for repayment is specified
  • Whether there is security held for the loan
  • Where there has been any demand for payment before the separation of the parties
  • Whether there has been any partial repayment
  • Whether there was an expectation or likelihood of repayment

Rebuttal Presumptions

Dispute resolution by lawyers, mediators, arbitrators, or the Court may be assisted by certain presumptions, including:

  • Presumption of resulting trust.  Gratuitous transfers to a non-family member may be held in trust by the recipient by the non-family member.  The law presumes that parties intended a bargain, not to make a gift.

This presumption may also apply to gratuitous transfers. This is true for parents to adult children presumed to be in trust for the child in a resulting trust.

  • Presumption of advancement: gratuitous transfers by a parent to a minor child may be presumed to be a gift.

These presumptions may be most important where evidence of the parties’ intentions is lacking.  The presumptions may be rebutted by evidence of the parties’ intentions. The importance of these transactions shows how important it is to consult a District of Columbia gift law dispute lawyers.