What is the law regarding money gifted to a son for a down payment on a house?

UPDATED: Oct 1, 2022

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What is the law regarding money gifted to a son for a down payment on a house?

We gifted/borrowed 22k to our son for the down payment on a house 3 years ago. Now his wife wants a divorce and feels entitled to half of everything, however she also owes us for paying off her defaulted student loans for her credit rating and the differences in trade-ins on several vehicles loaned before they got married. What to do regarding these debts?

Asked on September 14, 2018 under Family Law, Minnesota


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

If the money was a gift, not a loan, the recipient does not have to repay it. Since it was almost certainly required by the lender to be a gift, not  a loan, to qualify for the mortgage, the wife has no obligation to pay you anything for the down payment. She would also not be obligated to repay you for paying off her student loans, etc. if your doing so was a gift at the time it was made (no agreement to repay entered into before you provided the money)--you cannot retroactively or after the fact convert a gift to a loan. So it may well be that she does not in fact owe you anything. 
However, if she is on the title of the house, then as an owner, she is entitled to her share of the proceeds (i.e. if she and your son are on the title, each gets 1/2 the proceeds as a 1/2 owner).

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