Personal Loans: Avoiding Financial Complications
If you are considering offering to loan money to a loved one, there are administrative matters and some financial, tax, and regulatory considerations to cover to protect yourself and your relationship.
The ongoing Covid-19 crisis is affecting the financial well-being of many people around the world, potentially forcing them to rely on family and friends to borrow money. If you have offered, or are considering offering to loan money to a loved one, there are administrative matters and some financial, tax, and regulatory considerations to cover to protect yourself and your relationship.
Here are a few articles that may be useful:
“How to Handle Lending and Borrowing Money With Family” (TheBalance.com)
“The tax-smart way to loan money to family members” (MarketWatch.com)
Additional resources:
Interest-Free and Below Market Loans (New Capital Planning Center)
While lending money to a family member or friend may be necessary, some planning and open communication will help set expectations and help avoid financial and legal problems. If you have any questions, please contact Jaycee Smalley, CFP at jsmalley@newcapitalmgmt.com or 713-388-6322.