Intra-Family Loans Can Be Beneficial

Intra-family loans might be a good way to borrow at a lower interest rate and keep the profit in the family. These loans can be ideal for starting up a business, purchasing investment property, and borrowing for the first time. They can also be risky though for some families. If families are able to work out intra-family loan, one of the benefits is that the loans are often forgiven if the lending parent dies. These loans also have some tax benefits as well.

See Ann Marsh, Planners Use Intra-Family Loans to Cut Out Middleman, Financial Planning, Nov. 9, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this article to my attention.