Many years ago a relative asked my parents for a loan so that he and his new wife could get the deposit for a house in Sydney. it was difficult for my parents, but they did it as a verbally agreed loan. Years went by and the loan was not repaid. Grandchildren arrived and the young couple developed a business and lived in the house they had bought. One day the husband discovered that his wife had been having an affair with his best friend - and they were planning to take the kids, clean out the house, and move to the blokes house. In the divorce, the wife kept the house and custody of the kids - with ex-husband paying for kids to go to expensive schools. My father asked about the loan being repaid. The ex-husband said "get it off his ex wife as she now has the house". The ex wife told my father "the loan was arranged between you and my ex husband - get it off him". Decades went by and my father still had not received the money back. He was dying of cancer and had virtually nil money in the bank. His wife was getting a Veterans Affairs wife's pension of $14.00 a fortnight and this would continue after his death. He insisted that his wife change her will to say that the debt would be deducted from anything the ex husband would receive when she died. She promised she would do this as she was also very disappointed at the ex's attitude. Years later, this was done and the (small by the time) amount was deducted from the ex's inheritance (share in house) and was shared equally to the other beneficiaries in her will. He was very annoyed that this ancient (interest free) loan had not been forgotten. Some people might say this was petty, but they thought the agreement had been deliberately ignored, that their near poverty had been ignored, and a lesson should be sent. My advice - give money as a gift, or do a loan in writing naming all parties involved.

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