Thinking about lending money to one of your children? In this episode of Asset Protection Today, elder law attorney Bill Alexander explains how family loans can quietly create problems for your estate plan, your other children, and your Medicaid eligibility, and how a simple written agreement prevents most of them.

Bill covers why parents lend money (a child's divorce, a home purchase, a new business, a medical crisis), why you shouldn't count on being repaid, and why a signed promissory note at the required federal interest rate is the best way to document the loan. He explains how your will or trust can treat an unpaid loan as an advancement against that child's inheritance or forgive it entirely, and why that matters for fairness among siblings.

He also explains a long-term care trap many families don't see coming: if you pay a child for care, rent, or groceries without a written agreement, those payments can be treated as gifts and penalized if you later apply for Medicaid. Using the example of a daughter who moves in to care for her mother, Bill shows why "move in with me and I'll give you the house" is often unfair to the other children, and how a care contract with a promissory note and security agreement works better.

If you've loaned money to family, or are paying a family member to help with care, this episode offers practical guidance from one of North Carolina's most respected elder law attorneys.

Want to learn more? W.G. Alexander & Associates hosts free educational webinars on asset protection, trust planning, and long-term care. Sign up at https://wgalaw.com/seminars/

(1:13) Family Loans
(2:07) Why Parents Lend Money to Children
(2:36) Promissory Notes & the Federal Interest Rate
(4:18) Long-Term Care, Medicaid Gifting & Penalties
(5:30) Fairness to Other Children: Advancement vs. Forgiveness
(6:20) Caregiver Child Example: The House, a Contract & a Security Agreement
(7:32) Wrap-Up & Free Webinar Info

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