A Gift Deed for Gifting Cash to a Son or Daughter is a formal document written by the donor to officially record the gift of cash to the donor’s son or daughter. Writing a gift deed when gifting cash to a son or daughter provides an official record of the gift. This is useful for ensuring that no taxes need to be paid either by the donor (the person giving cash – the parent) or the recipient (the child receiving the cash gift).
This gift must be given while the parent and the child are both alive. This rule prevents misuse of inheritance tax law.
Why Write a Gift Deed When Gifting Cash to Your Child?
Every country has different rules for how much a parent can give their child, both in a year and in a lifetime, without paying taxes on the gift. In many countries, including the United States, the limits are high, and most people never hit the limit. In the United States, any individual may gift each of their children $15,000 per year without having to file this gift on their tax return.
There is a lifetime gifting limit of $5.6 million in the United States. You can give up to this total amount without paying any taxes on your gifts as of 2019. This limit only includes amounts you give to each individual over the $15,000 annually, so you will likely not hit this lifetime gifting limit.
Exemptions:
In the United States, you can pay tuition and medical expenses for your child, and these expenses do not count as part of your lifetime gifting limit. These must be paid directly to the school or medical care provider to be exempt from the gifting limit.
Important: Be sure to check requirements in your country about how much you can gift your child without paying taxes on the gift.
What to Include in a Gift Deed for Gifting Cash
A deed gifting cash should contain some information about the donor, the recipient, and the gift. Here are the primary elements this gift deed should contain:
- Donor name and contact information
- Recipient name and contact information
- Date of gift
- Amount of gift
- Statement that the donor does not expect or require repayment
- Donor signature
- Recipient signature
Witness signatures and contact information if required in your country.
How to Write a Deed for Gifting Cash to Your Child
The statement that the gift is given without consideration (repayment of any kind) is the most important element of this deed. Write your deed with this in mind. It does not need to be overly complicated or formal.
This deed serves primarily to ensure that the gift is never questioned and to record the date and amount of the gift. If you give more than $15,000 to any of your children in one year, you will need this deed for tax purposes. Any amount over $15,000 will go toward your lifetime gifting limit.
Using a basic format for this deed can simplify the process of creating your deed. Below we have provided a basic format for a deed for gifting cash to your son or daughter and a sample deed demonstrating its use.
If you are gifting cash to your child for a specific purpose, be sure you check for any special rules. Rules may apply if you are gifting cash to be applied toward a car or a mortgage down payment, for example. Check with the lender to find out exactly what your deed should cover.
Gift Deed for Gifting Cash to Son/Daughter (Format)
Here is the basic format for a deed for gifting cash to your son or daughter.
{date}
To whom it may concern,
I hereby give my {relationship to recipient}, {recipient name} a cash gift of {amount of money}. I do not expect or require repayment in any form for this gift.
If you need any information about this cash gift, please contact me at {your preferred contact information}.
Sincerely,
{your signature}
{your name}
{your address}
{your phone number}
{your email address}
{child’s signature}
{child’s name}
{child’s address}
{child’s phone number}
Sample Gift Deed for Gifting Cash to Son/Daughter
Here is a sample deed based on the basic format above.
May 22, 2023
To whom it may concern,
I hereby give my daughter, Mallory Fisher, a cash gift of $10,000. I do not expect or require repayment in any form for this gift.
If you need any information about this cash gift, please contact me at fisherjeremy@email.com.
Sincerely,
Jeremy Fisher
Jeremy Fisher
1000 South Newton Place
Elysium, NC 39885
(672) 999-5778
fisherjeremy@email.com
Mallory Fisher
Mallory Fisher
3056 West Kenosha
Elysium, NC 39885
(985) 897-2345
Gift Deed for Gifting Cash to Son/Daughter (Word Template)
• Check your country’s gifting limits
• Check with the lender if your gift is to be applied to a purchase
• Include the date and amount of the gift
• State clearly that you expect no repayment
• Keep a copy of the deed and give a copy to your child
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