spouse signature required?

Question

I'm returning to REI after about 25 years out of the game. Things have changed a lot and I'm trying to get up to speed on current business methods.

My question - Do I have any legal requirement to include my spouse's signature on contracts and other documents, while operating under my name only? I will be focusing on wholesaling to start but will form a LLC later when I move on to buy and hold. At this time, I just need to know about purchasing properties in my name only.

My reason for this concern is that my spouse is 100% negative about pretty much anything in the world, and has no inclination to learn about anything financial. He's also old and I just don't have the inclination to even try to teach that old dog any new tricks. I've seen several discussions here about getting the spouse on board with investing as in a supportive role but I will not even be wasting my energy to do that. We've been married almost 30 years so by now I know which battles to pick. However, his retirement is secure and mine isn't. My business interest has always been in real estate and I'm anxious to get back into the game. He will not be involved at all unless I am forced to do so by law.

I live in NC and will be focusing my efforts in NC and nearby TN, neither of which are community property states.

Thank you for your experience and thoughts on this.

Kim

Jerry W. · Answer

@Kim Mayhew it depends on the state law where the property is located. Each state may have different property law. Most likely you will not have any problems unless the ownership of the property passes to you. If you only assign a contract your spouse will not need to sign. if you buy a house to flip it you may have to execute a homestead exemption in some states to show it was not your spouses primary home or homestead. Your spouse should not have to sign any documents that I can think of but I do not know the specific laws of where you live so I cannot be positive.

Kim Mayhew · Answer

Thanks everyone for your responses, I really appreciate them. I knew this would be a state specific issue. I'll verify with attorney/title company when I'm ready to sign something, but just needed some opinions prior to setting up the business. Sounds like I'll be fine to work on my own while doing assignments, which is what I did in another state years ago. My plan is to put everything into trusts when I get to the buy and hold level, so that will be done differently I'm sure and I'll deal with that then. I have no intention to cut the spouse out of his rights to property, just want to keep his annoyance out of the day-to-day operations as much as possible. The advice about a separate account has been taken care of for years, but is a good point as well. Is it typical, or even desired, to do contract assignments through an LLC? Thanks again! This is a great community! Kim

Thomas S. · Answer

There are 15 marital vesting states of which both NC and TN are not so you can sign individually for purchase purposes.

David Krulac · Answer

@Kim Mayhew As stated above it depends on state law. And there is a lot of variance in state law so if you are investing in multiple states you need to check out each state. An investor I know has a pre-nuptial agreement (could also be a post nuptial agreement) that gives him the authority to sign any documents on his own without spousal signatures. This pre nup is recorded in the courthouse in each county that he does business. Here in Pa. the title companies want spousal signatures on selling deeds in the absence of a pre-nup, recorded or otherwise. Community property states, largely in the west have a whole different set of rules/regs. 17 states have deeds with "Tenants by the Entireties" which applies only to married couples.

Bill Gulley · Answer

Welcome to BP! There's an old saying in RE, takes one to buy and two to sell with a married person. As Jerry mentioned, ownership interests stem from homestead exemptions. You might find it easier to form an LLC and hold property in the company name. You probably comingle your money, next check you get open an account in your name but you can make him a beneficiary on the account. This is a personal account. (You can always then deposit funds from your personal account to a joint account) But with your account, then open the LLC so that there is no accounting trail of joint funds to start it. Then keep company money separate from all personal funds, but you take a draw for your earnings. With this you should be insulated, however, state law may say otherwise as Jerry mentioned. Call a title closing company in the area you'll do business and run this by them, they can tell you what they will require. :)

Sharad M. · Answer

Firstly, welcome back to RE Investing and best wishes for your future success. I own my properties under several LLCs and I am the sole member of them, so I sign all the documents. As long you are the only member, you will not need your spouse's signature. When I first started investing, my wife was nervous about the whole idea of me leaving my job, but she still supported me. I have always looked at the worst case scenario and as long as I can live with the worst case scenario, I am okay with the decision. I was 27 when I started investing, so I explained to my wife that the worst case scenario is that we make couple of bad investments and lose our invested capital; however, if everything works out how I am planning, the upside would be too high vs the downside. My wife has zero interest in real estate, but she has been extremely supportive about my decision; she trusts me with the money. Of all the houses I have purchased, she only looked at the first two. She couldn't even name all the cities that I have bought properties in or names of all the LLCs, but that's the trust level my wife and I have. I keep an updated spreadsheet with all the properties information and other important information listed in there and she knows where that is if in case something were to happen. Of course, each relationship is unique and this is something you will have to discuss with your spouse and see what works best for both of you.