Stepping into a minefield

Q I’m thinking of giving my son $100,000 to assist with his home loan. Can I do this as a gift? If not, can I go guarantor for his home loan? How long am I tied in as guarantor?

Hi, Peter, that is a good thing to be able to do for your son, but there are as many risks here as wandering around a minefield. The guarantor role terrifies me: your obligations would be for as long as the loan existed and I would not recommend this route without seeing a solicitor. The gift also worries me. If your son has a financial issue or even a relationship break-up, the gift is at risk.

So my preferred option is a documented loan to your son. In time to come you may choose to turn this into a gift but a loan arrangement protects your son and the $100,000 from unexpected life events. Again, chat to a solicitor about this.