Brother borrowing money from Mom — Terry says –Don’t do it!
Mon is willing to loan her son and wife $40,000.00 to be paid back in 72 mo. We have a form made out stating this and will we need to get a lawyer involved and witnessed, or notarized? If something happen to them will this hold up in court. I don’t believe they have a will. He will retire in a year.
Terry Says
Ugh. I hate the topic of family loans, because they almost always wind up in disagreements and acrimony. In fact, the first rule of family loans is NOT to make them unless you can afford to simply give the money!
Read this interesting article about how to document an inter-family loan.
And read this about the proper documentation forms.
https://legaltemplates.net/resources/personal-family/the-complete-guide-to-family-loan-agreements/
Then let’s be upfront about all of this. If they don’t repay, will your mother sue for the money? Will she have enough money to pay for an attorney?
Please tell her that she should decline this situation. He should keep working and not retire — so he has money and doesn’t need to borrow it! Doesn’t he have his own retirement account?? What about his wife?
If he dies — without a will – would she be responsible, even if signing the loan documents.
In fact, please tell your mother this from me: TERRY SAVAGE SAYS YOU SHOULD NOT MAKE THIS LOAN!! Period.
