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Lending money to a family member may seem like a simple, well-intentioned gesture; after all, it’s someone you love and trust, what could possibly go wrong? But when financial arrangements between family members go awry, the emotional and financial fallout can be significant. As one of Christchurch’s leading legal practices in family law and civil litigation, Weston Ward and Lascelles are unfortunately highly experienced in seeing how these disputes over money roll out. With fractured familial relationships and financial stress, the nice gesture transforms into a protracted legal battle. To avoid the risk of a family fall out, we strongly recommend seeking legal advice before lending money, even to those closest to you. You may feel reluctant to pay legal fees, but by doing so you have an opportunity to protect your money and, more importantly, your relationships. Here are ten compelling reasons how consulting a lawyer before handing over funds keeps your loan safe: 1. Clarify whether it’s a loan or a gift In legal terms, there’s a world of difference between a gift and a loan. If your family member later claims the money was gifted, rather than loaned, you may have no legal recourse to recover it. This is particularly problematic when there’s no written agreement. At Weston Ward and Lascelles, we help you define the nature of the transaction clearly and legally. A simple clause or agreement makes the difference between a repayable loan and a regretted gesture of goodwill. 2. Create a legally binding loan agreement Unlike selling or buying a property which always require a written contract, some verbal promises can be legally binding. However, they can be complex to uphold up in court, and even trickier to enforce. Enforcing a verbal contract relies on being able to demonstrate all the legal requirements of a legal contract have been met, i.e. including offer, acceptance, consideration, and an intention to create legal relations. From reading the previous sentence, you are likely feeling hot under the collar imagining the legal costs required to recoup your money. Weston Ward and Lascelles team specialise in civil litigation in Christchurch and can draft a legally binding contract to protect both parties. Should the matter result in a dispute, you have a signed legal loan agreement that is not open to discussion.