It’s not unusual for one member of a couple to be the money person—the one who manages the finances and chooses the investments, including multifamily real estate investments. Often, one spouse is quite happy to be left out of the financial loop. If this arrangement works well for you, there is no reason to change it. But there are situations, particularly when credit is involved, where the involvement of both spouses can produce better results. Also, should circumstances occur suddenly that put the nonfinancial spouse in a position where he or she needs to make financial decisions, a certain amount of financial literacy and knowledge of the family’s investments will prove beneficial.
Knowledge of Your Real Estate Investments Empowers A Spouse
Even if one spouse makes the financial decisions in the family, the other should have a basic knowledge of finance. This basic knowledge of the family’s finances and financial situation should be deep enough to enable appropriate action should something happen to the key decision maker.
The background knowledge needed to guarantee minimal functionality when handed the family’s financial reigns isn’t too difficult to attain. That task may be dwarfed by the practical considerations, however. Think about the number of accounts that have to be located and the passwords needed to access them. Keeping payments up to date and monitoring account activities are also basic requirements.
Additionally, there may be safe deposit boxes to keep track of and essential documents, such as licenses, certificates, deeds, policies, and passports that may have to be located. A spouse should also know, at the very least, the names of the family’s attorneys, financial planners, agents, and bankers. If you work closely and regularly with them, a personal introduction would be appropriate as well.
If you are the financial decision maker, your spouse should understand your business plan and real estate investment strategy—why the family owns an asset, what your plans for it are, where equity can be withdrawn if needed, and how to do that. If you are the less active spouse in your family’s financial life, the need to know these things should be evident.
Other information that should be shared and understood includes:
The Advantages of Teamwork
Sometimes there are direct and immediate advantages to both spouses being involved in the family finances. For example, since couples share debt but not credit, your spouse’s good credit score could improve your chances of receiving financing for a project or improve the conditions of that financing if they were part of the financing process. So, when you form an LLC to carry out a development project, you may benefit from making your spouse an investment property partner.
Finally, understanding how estate transfer works is essential for both spouses. Care should be taken to see that each would be adequately provided for during the probate process. Spouses’ wills and life insurance policies should be drawn or re-drawn so that they meet the needs of the surviving spouse. Seek the help of professionals to draw up a will and life insurance policy, and always keep those documents up to date.
A real estate investment management company can make sure that there is a financially sound long-term plan in place for your real estate investments. Working with you, we can address the possible future needs of your spouse and ensure that the plan is completely transparent.
At CWS Capital Partners, we are a fully-integrated multifamily real estate investment management firm that offers everything from due diligence and risk management to transaction support and property management. We specialize in assisting our clients with 1031 exchanges, acquisitions, repositioning, and development. We own and manage luxury multifamily investment communities in major markets around the country, and we employ a team of experts who can help you hone your investment strategy.
Please contact us to learn more about investing with CWS Capital Partners, or view our current offerings by completing our self-certification form for accredited or qualified investors.
The information provided here is for your general informational purposes only. It should not be considered a recommendation or personalized advisory advice. CWS has made this third party information available from authors it believes are knowledgeable and reliable resources. However, its accuracy or completeness cannot be guaranteed and sentiment may change due to legal or economic conditions.
All investments involve risk including the possible loss of principal. You should familiarize yourself with all risks associated with any investment product before investing.
Advisory services are provided by CWS Capital Partners LLC, a registered investment advisor.
Securities offered by CWS Capital Partners LLC are through an affiliated entity, CWS Investments. CWS Investments is a registered Broker Dealer, member FINRA, SIPC.