‘I love my son, but he is not careful with money.’ I’m retired and want to help my son. Should I buy him a home — and ask him to sign a promissory note?
February 22, 2023
Farrell Fritz Partner Neil V. Carbone was quoted in a recent MarketWatch Moneyist column discussing what to consider when buying property for adult children.
Neil V. Carbone, trusts and estates attorney at Farrell Fritz, said you could provide your son with an intrafamily mortgage loan. “Intrafamily loans can be good estate-planning vehicles because the interest on such a loan is generally lower than can be obtained through a commercial lender,” he says.
“The interest rate will typically be set at the AFR, or applicable federal rate, which is the lowest rate that can be charged without the loan being considered a gift. Another benefit of an intrafamily loan is that the repayment terms can be more flexible than a commercial lender may be willing to provide. ”
Read more of Neil’s insights via Morningstar here