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In this video, Michele discusses when to use a promissory note, emphasizing that it is necessary whenever you loan money to someone. It's crucial to determine whether the funds are a gift or a loan to ensure mutual understanding of repayment expectations. If someone asks you for money, clarify your intentions and establish how repayment will occur, especially for significant amounts. While legal recourse exists without a promissory note, it is advisable to have one to formalize the loan agreement and protect your interests. Michele stresses the importance of aligning expectations regarding repayment before proceeding with lending money.