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Shields v. Clark

PROPERTY LAW
Supreme Court of Alaska (2023)
Katie Raya

In Shields v. Clark, 534 P.3d 94 (Alaska 2023), the supreme court determined that a monetary transfer for home purchase, even when accompanied by a gift letter, could be recognized as an interest in the property if the parties’ conduct indicated their clear intention for the transfer to function as an investment in the home. (Id. at 96). A man, a woman, and the man’s grandmother jointly decided that the woman would secure a mortgage in her name for a shared home, with the grandmother selling her own property and issuing a gift letter to facilitate the mortgage qualification. (Id.). The parties then entered into a formal agreement recognizing the grandmother’s contribution, delineating financial responsibilities, and specifying how funds would be distributed upon the future disposition of the property. (Id. at 96–97). However, when the relationship soured, the woman attempted to sell the home and declined to repay the grandmother, and the grandmother sued. (Id. at 97). The superior court determined that the grandmother had not provided the money as a gift and ordered the woman to repay the grandmother. (Id.). The woman appealed, arguing that the grandmother disclaimed any interest in the property when she signed the gift letter, and that the later agreement violated the statute of frauds. (Id. at 98). The supreme court reasoned that whether the transferred money described in a gift letter is in fact a gift depends on the parties’ intent. (Id.). The evidence unequivocally showed that the parties had an agreement to collectively pool their finances to buy a home, and no one contests that the funds were meant as their investment in the property. (Id. at 99). The court further articulated that the later agreement did not violate the statute of frauds, as the statute requires only the signature of the party charged. (Id.). Affirming the lower court’s decision, the supreme court held that a monetary transfer accompanied by a gift letter could still be recognized as an interest in the property, and that an agreement did not violate the statute of frauds so long as it is signed by the party charged. (Id. at 96).

Shields v. Clark

PROPERTY LAW
Supreme Court of Alaska (2023)
Katie Raya

In Shields v. Clark, 534 P.3d 94 (Alaska 2023), the supreme court determined that a monetary transfer for home purchase, even when accompanied by a gift letter, could be recognized as an interest in the property if the parties’ conduct indicated their clear intention for the transfer to function as an investment in the home. (Id. at 96). A man, a woman, and the man’s grandmother jointly decided that the woman would secure a mortgage in her name for a shared home, with the grandmother selling her own property and issuing a gift letter to facilitate the mortgage qualification. (Id.). The parties then entered into a formal agreement recognizing the grandmother’s contribution, delineating financial responsibilities, and specifying how funds would be distributed upon the future disposition of the property. (Id. at 96–97). However, when the relationship soured, the woman attempted to sell the home and declined to repay the grandmother, and the grandmother sued. (Id. at 97). The superior court determined that the grandmother had not provided the money as a gift and ordered the woman to repay the grandmother. (Id.). The woman appealed, arguing that the grandmother disclaimed any interest in the property when she signed the gift letter, and that the later agreement violated the statute of frauds. (Id. at 98). The supreme court reasoned that whether the transferred money described in a gift letter is in fact a gift depends on the parties’ intent. (Id.). The evidence unequivocally showed that the parties had an agreement to collectively pool their finances to buy a home, and no one contests that the funds were meant as their investment in the property. (Id. at 99). The court further articulated that the later agreement did not violate the statute of frauds, as the statute requires only the signature of the party charged. (Id.). Affirming the lower court’s decision, the supreme court held that a monetary transfer accompanied by a gift letter could still be recognized as an interest in the property, and that an agreement did not violate the statute of frauds so long as it is signed by the party charged. (Id. at 96).