Imagine this: a close family member hits a rough patch and needs financial help. Naturally, someone in the family, like a parent, steps in and loans the money with a handshake agreement that the money is to be repaid. But what if the parent passes away before the debt is settled? From my experience, this situation can quickly cause family conflict. The borrowing child may claim the parent intended the money to be a gift and it doesn’t need to be repaid. Meanwhile, other beneficiaries, usually the borrower’s siblings, argue it was a loan that should be deducted from the borrower’s inheritance. Failing to properly document loans or gifts may result in family strife, substantial legal costs, and ultimately a smaller inheritance for all beneficiaries of an estate. Clearly documenting any financial help in your will and specifying whether funds were loans or gifts will assist the executor of the estate in ensuring inheritances are distributed correctly and prevent resentment between siblings.