Kutchins, Robbins & Diamond LTD.

Certified Public Accountants


Intra-Family Loans: Can They Benefit Your Family?

With the estate tax exemption at approximately $11.5 million most of our clients would not achieve any transfer tax savings from making below market interest rate loans and letting their children invest the loan proceeds and earn a higher return.


However, intra-family loans may still have value. Loans are still useful for parents who are not willing to give up money permanently or who need some cash flow from the underlying assets, even if it is less than the cash flow they would otherwise earn.


Mortgage loans might be particularly favorable for a family.  Some advantages are:

  • Lower interest rate
  • More flexible terms
  • Avoidance origination and other transaction fees
  • Ability to borrow even with a poor credit rating
  • Parents may forego a down payment
  • Pay off higher rate student loans
  • Keeps interest payments in the family
  • Income stream may exceed return on CD’s or bonds


Our team of professionals at KRD can help guide you through family wealth and transfer planning. Contact us today to learn more. 

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