Market Interest Rate Loans: A Simple And Effective Potential Estate Planning Technique

The authors discuss the beneficial wealth results of having a younger family member, rather than a third party, lend money to an older family member in exchange for a promissory note bearing market rate of interest.

A cursory review of recent estate planning techniques reveals their complexity.¹ Estate planners tout the virtues of these techniques, but even they recognize that these techniques suffer from potential shortcomings.² In addition, the implementation of these techniques often weights heavily on the minds and pocketbooks of clients. Simply put, clients are bewildered by the myriad of steps these techniques require and are often frustrated by the legal and administrative costs they entail.