If your cousin transferred money or property to you and you would like to protect this transfer, there are some precautions you can take to make sure that the transfer, if contested, can withstand court scrutiny. It is important that adequate measures are taken.
An Understanding of the Character of the Transfer
Before the transfer, the parties (your cousin and you) should be clear about the character of the transfer. Is it a gift, a loan, or a transfer with adequate consideration? A transfer with adequate consideration means that your cousin is getting something with equivalent value in return for the transfer of money. If your cousin is not getting anything and it is a gift, consult with a lawyer on whether there is a need to file a gift tax return. Usually, a gift tax return is required when giving a gift of more than $16,000 to one person who is not the spouse.
Check the Capacity of Your Cousin, the Transferor
Most contracts or transfers of money are contested on the ground that they are unauthorized or a product of undue influence. This requires a showing that your cousin is susceptible to being unduly influenced. Medical records are usually subpoenaed to see whether your cousin was under an illness that could affect his brain function or under mind-altering medication at the time of transfer. Even if your cousin has some moments of unsoundness of mind, he could have lucid intervals which could make a transfer valid. Ensure that the transfer is made when your cousin has capacity to make such transfer.
Document the Transfer
It is recommended that the terms and conditions of the transfer be documented in a contract. If it is a loan, it should state the interest rate and the payment terms and preferably accompanied by a promissory note. If it is a gift, it is recommended that your cousin sign a deed of donation, stating that the donation is an unconditional gift. You need to sign the deed of donation, confirming acceptance of the gift. Have the contract acknowledged before a notary. It will strengthen the credibility of the contract when it is challenged before the courts. File a gift tax return, if needed. Anyone who questions the gift will have to hurdle the challenge of claiming that it was not your cousin’s intention to give the gift, despite the filing of a gift tax return and the acknowledgement before the notary. Having a contract that documents the transfer, whether it is a gift, a loan, or payment for something, ensures that there is no confusion about the character of the transfer.
Making a Money Transfer
The best way to make a money transfer is through a bank transfer that shows the bank accounts the sent and received the money. If transfer is made through cash or check, signed acknowledgement receipts are necessary to prove that payments have been made.
Following the above steps will ensure that anyone contesting the transfer will have a difficult time in proving the invalidity of the transfer in court.
Making a Property Transfer
Property is transferred through a deed and recorded with the county where the property is located.
Many issues can arise out of a simple transfer of money from your cousin to you. Should you need assistance in defending a money or property transfer, the Law Offices of Albert Goodwin are here for you. We have offices in New York, NY, Brooklyn, NY, and Queens, NY. You can call us at 718-509-9774 or send us an email at firstname.lastname@example.org.