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Parents gifting to buy house

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manda521

Junior Member
What is the name of your state? Washington

My husband and I have married for a little over a year and things are just not working out. We bought our house from my parents and my plan is to keep the house by buying him out with his half of the equity.

Here is the problem, when we bought the house his parents gave us $15,000.00 as a "gift" and my parents gave us about $40,000.00 in equity as a gift. Both sets of parents had to sign that they were gifting these things to us.

My parents fully intended for this to be a gift and never expected us to pay them back. Even before anyone knew that we were thinking of not staying together, all of a sudden my husbands parents gift is a loan and they want it back - they had no way of knowing that we were not going to stay together so I know that is not the reason.

Apparently my husband knew all the time that it was a loan and also told his parents that it would be paid back with interest. While I on the other hand always thought it was a gift since that is the way it was portrayed from the begining.

No that we are getting a divorce he not only wants half the equity in the house but also wants me to pay half of what is owed to his parents too.

My questions are: Since my parents gifted us such a large amount, is he really entitled to anything from the house or do I still need to pay him half the equity.

Also, am I under any obligation to pay half of what he promised his parents, or will this be his responsibiity to pay out of his half of the equity?

Thank you for your help.
 


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penelope10

Senior Member
manda521 said:
What is the name of your state? Washington

My husband and I have married for a little over a year and things are just not working out. We bought our house from my parents and my plan is to keep the house by buying him out with his half of the equity.

Here is the problem, when we bought the house his parents gave us $15,000.00 as a "gift" and my parents gave us about $40,000.00 in equity as a gift. Both sets of parents had to sign that they were gifting these things to us.

My parents fully intended for this to be a gift and never expected us to pay them back. Even before anyone knew that we were thinking of not staying together, all of a sudden my husbands parents gift is a loan and they want it back - they had no way of knowing that we were not going to stay together so I know that is not the reason.

Apparently my husband knew all the time that it was a loan and also told his parents that it would be paid back with interest. While I on the other hand always thought it was a gift since that is the way it was portrayed from the begining.

No that we are getting a divorce he not only wants half the equity in the house but also wants me to pay half of what is owed to his parents too.

My questions are: Since my parents gifted us such a large amount, is he really entitled to anything from the house or do I still need to pay him half the equity.

Also, am I under any obligation to pay half of what he promised his parents, or will this be his responsibiity to pay out of his half of the equity?

Thank you for your help.
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If his parents signed something saying it was a gift to both of you then it's a gift. Same thing with your parents. What did you guys do with the $15,000.00 dollars? Did you pay down the note with it, buy furniture, or what? I assume you guys purchased the home from your folks since you stated that the $40,000.00 was equity.....
 
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mistoffolees

Senior Member
The 'loan' is no one's responsibility to pay back because it wasn't a loan. You can't unilaterally turn a gift into a loan after the fact by merely stating that it was a loan (even if they HADN'T signed the gift papers).

Of course, if your stbx wants to pay back his parents from his own money, he's free to do that, but none of it should come out of your half.
 
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manda521

Junior Member
Yes we bought the house from my parents, thanks for the responses. Can I gather from your responses that even though my parents gave us more in the way of a gift I am still legaly liable to give him his half of the equity? I am going to have to apply for loan to do it.

Thanks again for your help.
 
Zigner

Zigner

Senior Member, Non-Attorney
manda521 said:
Yes we bought the house from my parents, thanks for the responses. Can I gather from your responses that even though my parents gave us more in the way of a gift I am still legaly liable to give him his half of the equity? I am going to have to apply for loan to do it.

Thanks again for your help.
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As they say...what's good for the goose is good for the gander!
(The answer is yes)
 
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penelope10

Senior Member
manda521 said:
Yes we bought the house from my parents, thanks for the responses. Can I gather from your responses that even though my parents gave us more in the way of a gift I am still legaly liable to give him his half of the equity? I am going to have to apply for loan to do it.

Thanks again for your help.
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Yep, that's correct. And personally (and I could be wrong) STBX may be angling for more than his half. Hence his parents now stating that the $15,000.00 was not a gift, but a loan. (That's also why I asked exactly what you guys did with the money). Hopefully you have a copy of this agreement stating that these funds were a GIFT.
 
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nextwife

Senior Member
It's lending FRAUD to represent funds as a gift that are actually a loan. Are you saying you all made fraudulant representations to get a mtg?
 
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penelope10

Senior Member
nextwife said:
It's lending FRAUD to represent funds as a gift that are actually a loan. Are you saying you all made fraudulant representations to get a mtg?
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Respectfully NW, I think what she's saying is that STBX's parents gave the couple the money as a gift. This would not seem too far fetched to me if they were happy about the marriage as were her parents when they gifted the couple $40,000.00 of equity in the house.

If they signed something stating it was a gift then it's a gift. I doubt very seriously that these folks are going to go to court and say "Hey we helped our son and his STBX to commit fraud on their mortgage."

Like I said his parents may have been motivated to help in a gift of $$ especially if they saw that their son's in-laws were acting in a generous manner.

I can understand where you're coming from though since I think you once stated you worked in a mortgage related field. Sigh, bet you are all too familiar with folks that claim a loan is a gift in order to qualify for a mortgage.
 
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mistoffolees

Senior Member
manda521 said:
Yes we bought the house from my parents, thanks for the responses. Can I gather from your responses that even though my parents gave us more in the way of a gift I am still legaly liable to give him his half of the equity? I am going to have to apply for loan to do it.

Thanks again for your help.
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You're required to give him half of the marital portion of the equity. Whether the $40 K and $15 K gifts are marital equity or your own personal contribution would have to be determined by an attorney. However, it's likely that the gifts will count as marital equity (since you used the money to jointly buy a home), so you'll probably each get half of the total equity. But ask your attorney.
 
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mistoffolees

Senior Member
nextwife said:
If he OWNS half, he gets half the equity.
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He gets half the MARITAL equity.

The question is whether the parental gifts count as marital equity or non-marital equity. WIthout knowing the specifics (what the agreements say, what the timing was, etc), it's hard to be certain. As I said, the parental gifts PROBABLY count as marital assets, but it's worth asking a local attorney to be sure.
 
LdiJ

LdiJ

Senior Member
mistoffolees said:
He gets half the MARITAL equity.

The question is whether the parental gifts count as marital equity or non-marital equity. WIthout knowing the specifics (what the agreements say, what the timing was, etc), it's hard to be certain. As I said, the parental gifts PROBABLY count as marital assets, but it's worth asking a local attorney to be sure.
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Gifts are only separate property if they are not comingled. These gifts were comingled into a home with joint ownership.

Hubby is just trying to get more than his fair share....and his parents are conspiring to assist him with that.
 
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mistoffolees

Senior Member
LdiJ said:
Gifts are only separate property if they are not comingled. These gifts were comingled into a home with joint ownership.

Hubby is just trying to get more than his fair share....and his parents are conspiring to assist him with that.
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I understand that. But, again, it is worth talking with an attorney because I can think of at least one example where the gifts would remain separate property.

If the gifts were given to each person BEFORE THE MARRIAGE and then they bought the house with that money, then I believe the gifts would be considered separate property and she would not have to share her larger gift with him. But I don't have the details which is why I'm suggesting that she see an attorney.
 
Zigner

Zigner

Senior Member, Non-Attorney
mistoffolees said:
If the gifts were given to each person BEFORE THE MARRIAGE and then they bought the house with that money, then I believe the gifts would be considered separate property
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Google Comingled Assetts and you will see why you are wrong.
 
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MFinancier

Member
manda521

Don't shoot the messenger manda but I have first hand knowlege of a poor respondent here in IL. that paid CASH for 100% of his house with separate assets the year he got married..all documented...15 years later...judges comment..."all in the name of love"...ruled a gift to the marital estate! Judge did take it into consideration (being an equitable distribution state) and gave non working spouse petitioner ONLY 55% of the assets instead of the usual 60%! Imagine that...55% of all the marital assets which included a house their spouse bought with his own non marital funds!!! No appeal was ever made! Thats family law for you!!
 
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