The Boomer” is a column written for adults nearing retirement age and those already in their “golden years.” It will also promote reader interaction by posting e-mail responses and answering reader questions. E-mail your questions or topic ideas to thefoxboomer@gmail.com.

I remember it well: It was 1974, my wife and I had only been married six months and we decided to move to Florida. I had been recently laid off from my job as an assistant marketing director at a newly-built retirement community due to the economy, and I had some contacts in Florida with job opportunities.

We had no savings to speak of, so I went to my "retired" Pop Pop who was living on a fixed income, but had some money saved (that was hidden under a mattress in the house) and asked him for a loan. He immediately asked me how much and loaned me $2,000 in cash. I told him I would pay him back with interest but he looked at me and said, "You don't need to pay interest, but if you can pay me back that would be just fine." Well, with that money we were able to buy a house and start our new life in Florida. No, I never did get to pay Pop back, but his generosity gave us a fresh start and we wouldn’t have been able to do it without his help.

Studies show that more young adults are turning to their grandparent for help buying their first home—skipping a generation because their parents are too worried about retirement savings.

Daniel Van Der Vliet, director of the Family Business Initiative at the University of Vermont, shares the following tips for baby boomers being asked for loans by their grandchildren.

Boomer: What is the best way to make sure you get your money back and keep family ties together?

Van Der Vliet: Here’s a general rule of thumb: If you loan money to a family member, you should be prepared to write it off as a gift. Mixing business with family is always dicey – how will you truly enforce failure to repay or negligence of expenditures? Are you able to objectively consider the real costs of not getting your money back as it relates to family ties and legacy?

Boomer: What rules and stipulations should be set for the loan?

Van Der Vliet: Consider rules and stipulations that mirror any credible financial institution. While offering a lower rate may seem like the ‘family’ thing to do, having rates similar to a bank or lending institutions emphasizes the business legitimacy of the loan. Better yet, consider higher rates to encourage going through a bank instead. Allow the family member to seriously consider all options.

Boomer: Should you charge interest rates with the payback plan?

Van Der Vliet: If you find yourself in a position where a loan to family is necessary, it should include all of the normal stipulations you would have in any business loan: purpose, interest rate, repayment terms, security/collateral, co-signor, etc.

Boomer: If I was to lend money to my grandson, should I have an attorney represent me?

Van Der Vliet: Again, a litmus test here is to consider how would you handle this if it were not a family member. In this case, yes, an attorney will assist with the proper language, terms and paperwork. There may even be gift-tax ramifications to this "loan" to be aware of (IRS Publication 550 addresses these issues.) It is also feasible to consider setting up an independent Board to allocate money to family members which would have more oversight to repayment and how the money would be used, similar to a Family Foundation. In all cases, always consult with a professional if you truly expect any portion of the money to be repaid.

Boomer: If I have substantial savings and I was going to leave money to my grandchildren in my will and they come to me for a loan, should I just give them the money I would have left them and delete them from my will?

Van Der Vliet: For grandparents with significant wealth, perhaps an annual gifting program is more appropriate and allows for an annual review of how the money is distributed and allocated. You might also consider a savings plan (529) which has specific purposes attached to it, education, for instance. If it is not stipulated in writing and executed legally, there will be no way to insure your wishes are carried out.