GIVE THE KID A BREAK

Peter F. Baigent CFP, CLU, CHFC, RFP.

Reprinted from the Balanced Report - first published: Winter 1989An article about loans to family membersFor some months Marie (my wife) and I explored and consulted with other financial planners to put together the perfect plan for family loans, to help our children buy their first home. We think we have come up with the perfect plan.There are two major problems with this type of loan. The parents seldom get their money back and if the child is laid off or encounters some financial difficulty, the parents' monthly interest payments are usually the first expense to be cut. This can cause some hardship to the parents if they are dependent on the monthly payments for their retirement income. Many of our retired clients are well off financially or at least have more coming in each month than they require.

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