Partnership with Relative

[Ben Hughes]

So me and my father-in-law have verbally agreed to form a partnership for investing purposes. I've already opened an bank account for it. I put in 75% and he put in 25%. Anyone have a form to make stuff like this official or should I just draw up something myself to that effect and have both of us sign it.

[Matt Devincenzo]

I invest with family, but mine are my parents and sister. Ours is not formally drawn up or anything like that, but we all are working to a common goal which is mom and dad being financially taken care of toward retirement, and my sister and I for our future. We have lost money (in the past while learning the ropes) and we all just moved on because it wasn't any blame game it was just what happened. And ultimately whatever Mom and Dad get will end up back with us at some point.

That being said with an in-law I would have it drawn up, not because you can't work things out on your own, but there is more of a likelihood of hitting a financial speed bump and needing to have come to an agreement on how it will be dealt with before your emotions got involved and might change someone's perspective down the road.

Also every deal that I do that is partnered I go into with the understanding that I will walk away to preserve our relationship, and I am ok with it not being the best financial decision for me personally.

If my sister or I were married I would also draw one up prior to doing anything with her. Simply because while the deal may be between us there are now additional parties that influence the decision since there is a family behind the decision maker that might not have say in the deal but will influence the end goal for both of us.