[Elarson]

Originally Posted by tigergto

Although you didn’t ask for my advice. I strongly suggest you not do it. This a completely different time then your father’s. I would definitely advise you to have legal documents drawn up.

I agree about documents. Even if the person is 100% trustworthy, not having things in writing opens up the chance for misunderstandings and damaged friendships.

And if one or both of you passes, what happens to the outstanding balance that is owed to your heirs....and his heirs can claim ignorance of the agreement?

Eric

[muscle_collector]

being in numerous businesses, one was i built homes for 40+ years and i still remember the first time i had to sign a contract. a guy came to look at car parts and got to talking and told him i was a home builder. they were looking at building a new home but were uneasy with the builder that a realtor was pushing on them. after several talks they decided to go with me and his realtor told him that he was making a big mistake using a "car buddy" to build their home. well i had told him my father built homes for 35 years and i had been building and always did on a handshake and neither of us had had a lawsuit. the bank insisted on a contract so we drew one up and signed it. fast forward 30 years i cant begin to tell you how many commercial projects from buildings to tenant improvement and remodels, new homes over 10k sq ft i have built for him and we have never had a cross word with each other. we refer to my business as "car buddy construction co" and he is the only person i will still build for today.

[fyrffytr1]

Originally Posted by Elarson

I agree about documents. Even if the person is 100% trustworthy, not having things in writing opens up the chance for misunderstandings and damaged friendships.

And if one or both of you passes, what happens to the outstanding balance that is owed to your heirs....and his heirs can claim ignorance of the agreement?

Eric

I owe nothing to my heirs! I will give them out of my own choice, but as far as owing them something, that is another story.

[Elarson]

Originally Posted by fyrffytr1

I owe nothing to my heirs! I will give them out of my own choice, but as far as owing them something, that is another story.

To clarify my statement, if Jack passes before the loan is repaid, the borrower would owe the balance to Jack's ESTATE. Then the estate distributes the assets to whatever heirs Jack has designated....to family members, to a pygmy goat rescue or dollar bills poured out of the side of a helicopter.

Eric

[Jack Gifford]

Thanks Eric for mentioning IRS considerations.

[NeighborsComplaint]

If a lending institution won’t loan him the money, on his own, in all likelihood they have no surety or collateral to collect in the event of forfeiture. If you’re a multi-millionaire and can afford to lose $400K, you are certainly taking the first step.

[ta6point6]

Well good for you trying to help out your fellow American. I do feel for the farmers of America and how a lot operate on good faith and not sure when crops are ready to harvest, who and what will be paid for them. Now fuel, fertilizer and farm equipment is going up to add to their burden. Oh yeah lets not forget about water rights being an ongoing issue as well and now foreign countries are buying American farmland. Oh and last but not least the large corporations that can predict what a farmers harvest would bring and raise farm operation costs just a fraction below what profit might be or maybe the farmer just breaks even. It is no wonder farm bankruptcies were up, hope your buddy can stay afloat till better times arrive