Lent your child money – perhaps to purchase a house or a car? Maybe you don’t want the money back. Maybe it was a gift. It doesn’t matter. Build a Parent Loan Agreement to protect both you and your child.
With the Loan Agreement, you recover the money if your child:
1. goes bankrupt
3. mentally unsound
For example, your daughter gets married. You loan her $200k to buy a house. You build a Parent Loan Agreement. Ten years later, she divorces. Normally, you lose half of the money. However, with the parent Loan Agreement, you get it all back.
You can state how much is loaned, when and how it is repaid, and any interest rate.
For example, you make the loan payable ‘on demand’. You can also start charging interest at any time.
Even if you loaned your child the money years ago, you can still create the Agreement today and be protected.
Press ‘Start Building’ button above to get our:
1. Parent Loan Agreement – ready to sign
2. Law firm’s letter of advice. Press the above “Sample” button to see a sample
You are building your legal document on a law firm’s website. You can telephone us anytime to get legal advice. We can help you answer the questions.
Adjunct Professor, Dr Brett Davies, CTA, AIAMA, BJuris, LLB, Dip Ed, BArts(Hons), LLM, MBA, SJD
Legal Consolidated Barristers & Solicitors
National Australian law firm
Reception: 1800 141 612
Email: [email protected]
How do I build the Parent Loan Agreement?
Answer the questions on our website
Read the Summary page
Lock and Build your document
Type in your Credit Card details
The Loan Agreement, our covering letter and Tax Invoice are emailed to you
Print and sign the Agreement
What do I get?
You will receive an email that contains:
Loan Agreement Document
Our law firm’s letter of advice on our law firm’s letterhead and signed by one of our Partners.
If you do know, but are paying it in instalments, then put it all in as one figure.
Otherwise, just put in the total figure. Remember to put in the dollar sign.
If you want it all paid back on the one date, just enter that date in.
Word it how you like. For example
1) “Payable in instalments of 10% per calendar month”
2) “Half to be paid on 21 September 2018, and the remainder to be paid on 21 September 2019”
3) “$100 to be repaid weekly for 10 weeks starting from 4 July 2018”
1) If you are charging no interest, put the word “Nil”
2) If you aren’t sure what the interest rate is yet, leave it as the default, which is “as demanded from the lender from time to time”
3) You can put in a flat rate, for example, “5%” (don’t forget to put the % sign in)
4) Keep it variable, for example “2% above the Commonwealth Bank interest rate”.
5) You can also use the inflation rate. You could word it something like “calculated according to the percentage increase in the Consumer Price Index (all groups) for the average of the capital cities of the Commonwealth of Australia (as published from time to time by the Australian Bureau of Statistics or body that takes over that function)”.