What Is a Gift Letter?
A gift letter is a document that states the amount of borrowed money from a lender or relative is a gift and not a loan. It contains different elements that keep the letter valid, such as the amount of donation, donor's complete name, donor's relationship with the client, terms, and donor's signature.
How To Write a Gift Letter
Based on the report by Debt.org, each year, there are $89 million loans between family and friends in the US. Writing down the terms in a document helps both parties secure the deal. We created a list of the steps below that you can follow in making an appropriate letter.
1. Acknowledge the Lender or Donor
Showing appreciation means you have to acknowledge the donor or lender into your formal letter. Here, you have to state the donor's complete name, yours, or the giftee's relationship with the donor, contact information, and address. Remember, this section must be accurate and complete to identify that the person you acknowledge is correct.
2. Write Down the Deposit Amount
Next, in your sample letter, you have to accurately write down the dollar amount the lender offered. And whether it is $20,000 or $30,000, along with it must be the date when the money was transferred. This is important so that both the lender and the giftee understand to agree on the same amount.
3. Specify the Terms
At this point, you have finally outlined the essential information and the amount offered by the donor. The next thing you will do is specify all the agreements, mainly declaring that repaying the gift amount given by the donor isn't necessary. This verifies that both parties keep documentation for later proof.
4. Observe Formality
A gift letter does not necessarily need to be long to call it comprehensive. Instead, it must contain statement facts, and nothing else. Therefore, a simple letter with the correct format and layout is enough to call it valid and formal.
Is it necessary to notarize a gift letter?
A standard gift letter contains the exact amount deposited by the donor to the recipient. Therefore it is mandatory to sign the letter. However, the signatures don't need to be notarized at all.
What are the common types of letters?
There are various types of letters that are useful in business or personal use. Included in the list are the termination, resignation, complaint, sales, and intent.
What are the three main types of letters?
Letters are categorized into three different types that can be useful for various purposes. This includes the formal, informal, and semi-formal.
Is a deed of gift considered a legal document?
A deed of gift is a document that is used to prove money or property as a gift to another person. Therefore, it is a formal legal document.
When is the time that a gift letter is revoked?
A gift letter can be revoked when a specific event happens, and both the lender and the recipient agree to suspend the gift.