Lending money to family
If you’re lending money to family or friends, you absolutely need something in writing.
Contract law 101 is that money lent between family and friends is considered a gift unless there is something in writing.
Many people come to me having lent money to family members, without having documented it properly. They then have had some kind of issue, but it’s too late to try to recover it as a loan at that stage.
So better to do the document at the beginning.
It can be done with a simple, one page document, with the amount and term of loan. There doesn’t have to be interest. There doesn’t need to be security, but it is also easy to put a condition that it’s secured against real estate.
We easily put a Deed of Loan in place either before the money is lent, or soon after … before a problem arises.