Perhaps you're considering helping an adult child buy a first home, aiding a sibling who is struggling with debt, or supporting a relative who's lost a job. Those are laudable objectives, but beware before putting up serious money.

"Lending to family can be dangerous," says Dennis Stearns, a Greensboro, N.C., financial planner who has seen deadbeat relatives and bad communication doom deals and damage relationships.

In fact, according to a recent Money survey, 43% of readers who lent to family or friends weren't paid back in full; 27% hadn't received a dime. To avoid joining this unfortunate club, follow these steps before offering an advance.

Check your reserves. The arrangement can go wrong on either end. On your side, you want to be sure of two things. First, that if the loan falls through, it won't destroy a cherished relationship. And that you can truly afford to give up the money being requested.

The emotional part is for you alone to judge; we'll stick to the practical side of the equation. To start, verify that the loan won't jeopardize your retirement. Use T. Rowe Price's retirement income calculator to see if you'd be able to manage comfortably if the money isn't repaid. You also shouldn't play banker if it means taking on debt or selling assets you're not prepared to sell -- especially if the latter would trigger capital gains taxes.

Even if you can swing the loan, be sure your immediate family is onboard. Troubles can arise if you want to make the deal and your spouse doesn't. If you're lending to your child, bring his or her siblings into the loop; a big loan to one could reduce funds available to the others or be seen as favoritism.

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