Yes, in fact, that's what I told him in an email last week. Perhaps I was too harsh because I told him if that's what he wanted (not to reimburse me for the rest of the note, $44K, I'd let him have it, but that would be all that he'd get. He's a very stubborn, proud, obstinate, young man. I challenged him in a subsequent email to tell me about the parents of any of his friends who loaned their child that much money with similar conditions, and .... here's the part that upsets me the most, I don't recall him EVER expressing any gratitude for what I did to lighten his student loan burden. I told him that the loan changed our relationship from father/son to lender/debtor & that it was his fault that things have deteriorated. No response to either email. Time will tell....
Well. If the rental amounts to upwards of $8,900 net of tax per annum - which unless it is a very small house in a very unfashionable area it surely must? - Bob's your uncle. He can divert it to you.
Now that we see more of the picture I wouldn't say your son is being disrespectful. I would say he is taking the piss.
The only remaining question is, have you told him what you've told us about how you feel? Or are you maintaining a dignified but hurt silence?
He needs to be reminded that he himself proposed a formal arrangement and set the terms. If he is in fact operating on the assumption that you wouldn't seriously hold him to it, he needs to explain the basis of that (incorrect) assumption, and revise it.
You could allow him to renegotiate the terms to more practical ones if he has already overcommitted himself financially for the time being. But you are completely right to believe that, if only for the sake of his own self-respect, he must be required to remember his obligations.
Personally, I would adjust his part of your estate accordingly in your will. Just keep it up to date, so that if he pays, it's reflected in his part of the estate, assuming there will be an estate.
I borrowed money from my folks for a downpayment on a house 40 years ago and when I wasn't making payments on time, I got a letter from my mom chastizing me. I felt awful and I got right on it. Paid it off super fast after that. So your son isn't being respectful of you or your wife and your generosity.
I certainly wouldn't make any more loans to him. Maybe he'd do better with monthly repayment schedule instead of the annual balloon payment? Maybe that seems too large? That's another option I'd suggest.
Think about changing the terms of your estate plan so as to take your generosity into account, i.e., reduce what he would inherit by the amount of the loan. Is that possible?
Countrymouse, you'd make an excellent shrink! Yes, I'm generous to a fault. In the past year, he got married, bought a second half million dollar house (rents out the first), bought a 2nd, car, a lab puppy, lots of furniture & a 2nd big screen TV. And, his new bride is a FT nursing student. All of these expenditures make me feel like I'm being disrespected. Now, you have almost the entire picture. If he wasn't so damn smug & unappreciative about it, I'd probably just write it off. But, we have 2 other children who treat me with a lot more respect. Thanks again.
It is a loan made in good faith, and with interest rates set at a fair market average. Fair at the time, anyway.
3.2% now, though... base rates having done what they've done and all that...
A generous father might like to see if he felt like giving his son a bit of wiggle room on the interest. Or not. As you please.
For your own and your wife's sake, aside from any connected issues and worries that I expect make the whole thing emotionally much more complicated, I'd be tempted to regard any repayments as a bonus and try not to *expect* them, as such. Otherwise the money becomes a token for more important issues which are perhaps the ones you and your son ought in truth to be talking about?
By the way, this isn't a crime against the elderly. This loan was made in good faith with a child. Maybe son is not able to make this balloon payment. Ask to have a sit down. Agreement may need to be adjusted.
BigJim, lending money to family sure is fraught with issues, isnt it?!
When you say has " noncommital", what does that mean? That he doesn't seem to be taking this seriously? Does he work? Have you had a serious, not warm and fuzzy talk with him? Do you have a lawyer who can send a letter to nudge him?
Yes, I'm the father. You're correct about the status of the loan & perhaps I was getting ahead of myself. He's been making sporadic payments, but never one in the amount of the next annual payment ($8,900). If he makes that payment on January 14th, he would only be about $1,500 in the hole. But, I don't have a good feeling about him making a payment anywhere close to the $8,900. And, that's my concern. No Medicaid application in my future. Perhaps for my wife, but all of our assets are held in a Trust & I'm the sole trustee. Thanks for your responses.
He sounds like he lives WAY beyond his means, just obtw. Is this a lifelong pattern?
He's a very stubborn, proud, obstinate, young man. I challenged him in a subsequent email to tell me about the parents of any of his friends who loaned their child that much money with similar conditions, and .... here's the part that upsets me the most, I don't recall him EVER expressing any gratitude for what I did to lighten his student loan burden. I told him that the loan changed our relationship from father/son to lender/debtor & that it was his fault that things have deteriorated. No response to either email. Time will tell....
Does he, by George.
Well. If the rental amounts to upwards of $8,900 net of tax per annum - which unless it is a very small house in a very unfashionable area it surely must? - Bob's your uncle. He can divert it to you.
Now that we see more of the picture I wouldn't say your son is being disrespectful. I would say he is taking the piss.
The only remaining question is, have you told him what you've told us about how you feel? Or are you maintaining a dignified but hurt silence?
He needs to be reminded that he himself proposed a formal arrangement and set the terms. If he is in fact operating on the assumption that you wouldn't seriously hold him to it, he needs to explain the basis of that (incorrect) assumption, and revise it.
You could allow him to renegotiate the terms to more practical ones if he has already overcommitted himself financially for the time being. But you are completely right to believe that, if only for the sake of his own self-respect, he must be required to remember his obligations.
I borrowed money from my folks for a downpayment on a house 40 years ago and when I wasn't making payments on time, I got a letter from my mom chastizing me. I felt awful and I got right on it. Paid it off super fast after that. So your son isn't being respectful of you or your wife and your generosity.
I certainly wouldn't make any more loans to him. Maybe he'd do better with monthly repayment schedule instead of the annual balloon payment? Maybe that seems too large? That's another option I'd suggest.
Think about changing the terms of your estate plan so as to take your generosity into account, i.e., reduce what he would inherit by the amount of the loan. Is that possible?
If he wasn't so damn smug & unappreciative about it, I'd probably just write it off. But, we have 2 other children who treat me with a lot more respect.
Thanks again.
3.2% now, though... base rates having done what they've done and all that...
A generous father might like to see if he felt like giving his son a bit of wiggle room on the interest. Or not. As you please.
For your own and your wife's sake, aside from any connected issues and worries that I expect make the whole thing emotionally much more complicated, I'd be tempted to regard any repayments as a bonus and try not to *expect* them, as such. Otherwise the money becomes a token for more important issues which are perhaps the ones you and your son ought in truth to be talking about?
When you say has " noncommital", what does that mean? That he doesn't seem to be taking this seriously? Does he work? Have you had a serious, not warm and fuzzy talk with him? Do you have a lawyer who can send a letter to nudge him?
No Medicaid application in my future. Perhaps for my wife, but all of our assets are held in a Trust & I'm the sole trustee.
Thanks for your responses.