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As a advisor to investors and big business owners we repeatedly come across a widespread mistake that many people make.

That is a other half being presented as a guarantor to the financial institution, landlords or creditors of a corporation. Often their individual guarantee is even needed for the agreement to proceed yet it is given.

Why? Because the advisors do not defend you and spot out that it’s not necessary.

The upshot is that if whole partnership 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 since it is in their. Yet it is not in your interests. My recommendation is NEVER give your spouses guarantee in business or property transactions if you can keep away from it.

I have developed 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 individual guarantee on the transactions. Why?

To protect her from the potential danger and obligation. How did I avoid her being responsible? By saying ‘no’ to the banks and creditors when they asked. Did it hamper 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.

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