gmhTODAY 11 gmhToday Nov Dec 2016 - Page 15

FINANCIALLY Speaking Family Is Family, BUT Business Is Business I often receive calls from my older clients who are thinking about withdrawing money from their investment accounts to provide some financial assistance to adult children or grandchildren. While the intention is almost always a good one, it can have some unforeseen consequences if there is not a clear statement of expectations. Before you write that check, there are a few things you should consider to maintain harmony in the family. Some important questions to ask are: Is it a loan? Loans with low interest rates generally have strict lending standards, which is why a family member might be looking to you for the loan, rather than going to an institution, like a credit union or a bank. You and the family member can determine the interest rate on the loan, but if it is less than the IRS-required Applicable Federal Rate (AFR), the difference in dollars each year is considered a gift. The interest rate tax consequences should be discussed with your CPA for both the lender and the borrower. At the very least, there should be signed copies of a written agreement outlining the details of the loan. Often people remember things differently and a written agreement at the onset can help prevent a misunderstanding and save a lot of hard feelings later. Is it a gift? Jeffrey M. Orth is a Chartered Financial Consultant, a Certified Advisor in Senior Living, and an Investment Advisor Representative, with over 15 years of experi [H\˜H\[\[\ۘ[[[[\[K[X[X[Y[Y[XX[\ Y\]Z[XB܈ܛ\X\\[]]Hۜ[][ۜˈ\]Y][[X[ H܈[  MM KT\ NY]\[HHY [H[H]\H]HT[H\ۈ]H\ M [H\\ۈXXYX\]Y^܈ܛ\\]Z\Y [H[]H[ܙH[\[[[Y]\܈YX][ۈ܈YYX[^[\ˈ[H\\\و[ݙ\B M [Z] \]Z\\][HXZ]HY^]\ܛH[[[[\[YH^\˂[[HH[\š[H\XO”X[Y܈[][[\[[\BZ[H]HH\H[\Xۈ[\ۙ\H[[X[X\]K]HYو]H܂^Y\\[]HHXZ܈[\XۈBXX[]Hۈ[\[[X[]\K\XX[HY]\\[H\H[و[\\]˂][Y\\]\\H[ۜY\][\[YH[\\ZY [[\]\[Y[[\]O[\ܝ[HY[H[]و[ۙ^HYܙB[H[]وYO•[H]H]Hۙ^O’\]XH[H[Z[HY[X\[YY]][[ݙ\H\H[Hو[ۙ^O’YH[\Y[YY][۝H[\\[H[[HY\[H]Y[XX[[۝H^[\[[[YH܈BKY]\Z[Y[و[YK[[Y[KH[[]Xۈ\Y][XYB[\\ܝ[˂\][]\H[H\Y[[][H[Z[O[H[YH[ۙ^H[\[][B[Z[K\H\[X[܈Z\[\[[˜[\Y[[ˈH]X][ۈ[HXYB][ܜH[[Z[HY[X\۸&][][X]H[H[ۙ\K]]\YܙY[Y[[HYH]][ܚ][H[XX[\[Z[H][H[X][HZ\KX\H[YH[\\]X[K\]]^H[[X[Y\܈ZHH[YO•\H[YHH[YH[H[[›܈YY[ۙ^K][H[&]܈۸&][ٙ\\\[K\H[[X[Y\܋BY][Y\X\H8'Y\'H܈^HY[ [H\HZH\[HZY^K8'H[ݙHš[[H] ]HXY]^H[[X[Y\܈[H^\]H[H[H][ۂ]Y˸'BH]H[YY[]H\YYBܚ]Z\[[[[H]ۈX[[X[K[\H\\H[Z[[ۘ\Y]H[ܛX][ۈH\H\˜\][HۙY[X[ \\\[X[Y[KB[YX[[ٝ[\[\[[]Y\[Z[Y\[[ۙ^K[][X][ۈ\H^KXZH\H][H\H[\X\[[\XY[[BXZH[[X[X\[ۜ[[Y[X\]H[[X[ٙ\[ۘ[[Hو[[XZ[Z[[][[KY\\Y\\[]]Hً[X\]Y\[[\Y[Y\ܞH\X\ٙ\YYܛ܋ۜ[ [ [ˈ KY\\Y[\Y[Y\܋Y[X\SKT M Hۈ\X[]KK H\[KHL MJMM LM QU\[\[[وˈHXLLBSH8(SԑSS8(SPTSՑSPTPSPT MZ^KBM