How to Keep Your Spouse Safe in Partnership
3:16 AM
As a advisor to investors and business owners we often come across a widespread mistake that many people make.
That is a spouse being offered as a guarantor to the financial institution, landlords or creditors of a company. Frequently their individual guarantee is even needed for the agreement to proceed yet it is given.
Why? Because the advisors do not shield you and point out that it's not essential.
The upshot is that if total company or investment collapse happens, both spouses are fully legally responsible rather than just one. Sure, the creditor, bank or landlord asking for your spouses guarantee will explain it is necessary 100%.
This is because it is in their. Yet it is not in your interests. My advice is On no account give your spouses guarantee in company or property transactions if you can keep away from it.
I have created over 80 million dollars in property, and guaranteed a number of numerous big business and banking obligations, purchased multiple investment properties, - and my spouse has never signed a personal guarantee on the transactions. Why?
To guard her from the possible threat and obligation. How did I avoid her being legally responsible? By saying 'no' to the banks and creditors when they asked. Did it interfere with her lawful or marital rights to recuperate the property if we separated?
Defending your spouse from what can go wrong ought to be a high priority to not only look after the relationship but to ensure financial security. We all need to be positive about our business success, but have a realistic view of the events that go on in the world.
Summary
Protect your spouse from liability if you can help it. Personal guarantees and spouses should not go together. If you are negotiating with a landlord or creditor as a business owner and have to supply a guarantee, try not to give a guarantee at all, or limit the guarantee to a fixed sum Eg: 6 months rent.
If your spouse has no income, you should be able to avoid their guarantee being given to a lender. bank. Try using a mortgage broker to achieve this. Usually the banks (if dealing direct) will be very difficult to manage on this issue, especially in this recessionary climate.
That is a spouse being offered as a guarantor to the financial institution, landlords or creditors of a company. Frequently their individual guarantee is even needed for the agreement to proceed yet it is given.
Why? Because the advisors do not shield you and point out that it's not essential.
The upshot is that if total company or investment collapse happens, both spouses are fully legally responsible rather than just one. Sure, the creditor, bank or landlord asking for your spouses guarantee will explain it is necessary 100%.
This is because it is in their. Yet it is not in your interests. My advice is On no account give your spouses guarantee in company or property transactions if you can keep away from it.
I have created over 80 million dollars in property, and guaranteed a number of numerous big business and banking obligations, purchased multiple investment properties, - and my spouse has never signed a personal guarantee on the transactions. Why?
To guard her from the possible threat and obligation. How did I avoid her being legally responsible? By saying 'no' to the banks and creditors when they asked. Did it interfere with her lawful or marital rights to recuperate the property if we separated?
Defending your spouse from what can go wrong ought to be a high priority to not only look after the relationship but to ensure financial security. We all need to be positive about our business success, but have a realistic view of the events that go on in the world.
Summary
Protect your spouse from liability if you can help it. Personal guarantees and spouses should not go together. If you are negotiating with a landlord or creditor as a business owner and have to supply a guarantee, try not to give a guarantee at all, or limit the guarantee to a fixed sum Eg: 6 months rent.
If your spouse has no income, you should be able to avoid their guarantee being given to a lender. bank. Try using a mortgage broker to achieve this. Usually the banks (if dealing direct) will be very difficult to manage on this issue, especially in this recessionary climate.
About the Author:
Paul Easton works in marketing for Mathew Gilligan - an accountant and partner at Gilligan Rowe & Associates Ltd (GRA). GRA is an accounting firm specialising in property and business accounting in New Zealand. Search Engine Optimisation by Digitalawol.com
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