SAMPLE ARTICLE — written to show how the layout works. Not reviewed, not advice, and not for publication.
Most family groups do not set out to build a web of loans between their entities. It happens one reasonable step at a time. A trust distributes to a company because that is the sensible thing to do that year. The company lends money to a shareholder because a deposit is due. A few years later some of it is paid back. Each step made sense on the day it was taken.
How the money actually moves
By the time a group has been running for a decade, the movement between its entities is rarely something one person can describe from memory. A distribution here, a loan there, an amount repaid in part and then forgotten, a payment made by whichever entity happened to have cash in the account that week.
None of that is unusual, and none of it is necessarily wrong. What tends to be missing is a single document that says where the money went and on what terms.
Why the picture matters more than any single entry
Questions about loans between a company, a trust and the people behind them are rarely about one transaction. They are about the pattern — whether the arrangements are documented, whether they have been treated the same way from year to year, and whether the paperwork still describes what actually happened.
That is why we tend to start with a map rather than a question. Once the whole group is on one page, the questions usually ask themselves.
Most of what we untangle was never a decision. It was a series of reasonable steps that nobody looked at together.
What to have in front of you
None of the following tells you whether anything needs to change. They are simply the things worth gathering before that conversation:
- Every entity in the group, including the ones that are dormant but still registered
- Loans between entities, and whether each one is documented
- Amounts owed to, or by, the people behind the group
- Trust resolutions for the last few years, and whether they match what was actually paid
- Anything one entity has paid on behalf of another
What to discuss with your adviser
You don’t need to have everything worked out before speaking with your adviser. Start with the information you have and the questions you want to resolve.