Married, but only one spouse wants to do the business

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Married, but only one spouse wants to do the business

Dana N.
New York, NY · Member since 2013 · 54 posts · 7 votes

If my spouse doesn't want to be involved or have the business, and I form an LLC, will I have to be considered multi member because I am married? or can I form it as a single member?

Please advise.

Dana

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Andrew Bosworth
Rental Property Investor · Harrisburg, PA · Member since 2013 · 161 posts · 62 votes
12y

Dana,

Maybe you've done this already, but I would encourage you to offer your best "pitch" to your spouse prior to moving forward. This is only my opinion, but it will go much smoother long-term if both of you are on board. I caught the REI bug long before my wife did and she was initially very much against pursuing this type of investing...it's both of our money after all. I was convinced that REI was a sound investment for us, so I took the time to put together facts and figures (and prayed a lot!) to show her what led me to this decision. This took some time, but she is now on board - which was a major hurdle to jump. I'm much more confident moving forward now since we are on the same page. Heck, our spouses may be the toughest people to convince! If you can do that, then negotiating future RE deals may come easily for you. : )

As far as setting up legal entities, it looks like other BPers have already given you some good advice. As for a happy marriage, there's nothing better.

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  • Jon Klaus
    Developer · Garland, TX · Member since 2008 · 8k+ posts · 4k+ votes
    12y
    Originally posted by @Dana N.:
    If my spouse doesn't want to be involved or have the business, and I form an LLC, will I have to be considered multi member because I am married? or can I form it as a single member?

    Please advise.

    Dana

    You can set it up as single member.

    0Reply
  • Jean BolgerPro Member
    Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
    12y

    My husband is very supportive, but not actively involved in my real estate decisions. I had a lawyer set up my LLC and one of the things he asked (I'm not kidding!) was "How solid is your marriage?" I laughed and told him "extremely solid"- but he set it up as a single member anyway, and said it's just simpler in the long run. And that if I should die suddenly it wouldn't complicate things in any way since the spouse would automatically inherit.

    0Reply
  • Dana N.
    OP
    New York, NY · Member since 2013 · 54 posts · 7 votes
    12y

    Thank you Jon & Jean for your quick response.

    I have another question: Will this effect our taxes? We usually file joint and if I have an LLC then I will have to file single so that I won't affect spouse's taxes?

    Thanks again.

    Dana

    0Reply
  • Duncan Taylor
    Real Estate Investor · Member since 2013 · 866 posts · 487 votes
    12y
    Originally posted by @Dana N.:
    Thank you Jon & Jean for your quick response.

    I have another question: Will this effect our taxes? We usually file joint and if I have an LLC then I will have to file single so that I won't affect spouse's taxes?

    Thanks again.

    Dana

    You could and most likely should still file jointly.

    0Reply
  • Andrew Bosworth
    Rental Property Investor · Harrisburg, PA · Member since 2013 · 161 posts · 62 votes
    12y

    Dana,

    Maybe you've done this already, but I would encourage you to offer your best "pitch" to your spouse prior to moving forward. This is only my opinion, but it will go much smoother long-term if both of you are on board. I caught the REI bug long before my wife did and she was initially very much against pursuing this type of investing...it's both of our money after all. I was convinced that REI was a sound investment for us, so I took the time to put together facts and figures (and prayed a lot!) to show her what led me to this decision. This took some time, but she is now on board - which was a major hurdle to jump. I'm much more confident moving forward now since we are on the same page. Heck, our spouses may be the toughest people to convince! If you can do that, then negotiating future RE deals may come easily for you. : )

    As far as setting up legal entities, it looks like other BPers have already given you some good advice. As for a happy marriage, there's nothing better.

    1Reply
  • Joel OwensBusiness Member
    Moderator
    Real Estate Broker · Canton, GA · Member since 2010 · 15k+ posts · 11k+ votes
    12y

    I love commercial real estate and transacting with clients and also my own investing.

    My wife loves being a homemaker, talking to her mom on the phone, shopping, and having fun with the cats and decorating the house for the different seasons.

    We do talk and she listens to me talk endlessly of real estate and how my business and our investments are doing! lol

    I know not to overwhelm her on the details. I talk to family about the basics of commercial and to them it is complex. There are not as many people who understand the process or how to do what I do so that is a good thing....... : ) My wife does not want to be involved in real estate. She does enjoy the income it brings and quality of life for us. I would say to talk to your spouse and see WHAT REASONS they would not want to do it together with you? Is it reasons and misconceptions about real estate and once they find out that is not the case they are on board? OR They just in general have no interest in that and want to pursue other things in life?

    If it's the latter they can steal be a positive light in your endeavors and talk to you and occasionally take a look at seeing what you are doing. Maybe their interest will change over time or stay the same. It's not an all or nothing where they hate real estate or love it as much as you. There can be a middle ground on the spectrum somewhere in between that works for both. I get my real estate fix here on the forums, e-mailing clients, and meeting investors for lunch etc.

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  • Account Closed
    Residential Real Estate Broker · Oklahoma City, OK · Member since 2011 · 114 posts · 38 votes
    12y

    A related question for the tax gurus:

    A married couple runs a business together. One spouse works full-time in the business, the other helps out on a part-time basis. In order to minimize the social security portion of self-employment tax, I understand that the full-time spouse can be the owner of the business and the other spouse can be an employee. But what if (for estate planning or asset-protection purposes), the spouses would like to be co-owners of the business?

    Could they, for example, be 50/50 owners in an LLC and have the operating agreement specify that the profits will be split 80/20 or 90/10 or whatever reflects the share of work?

    Or, if one spouse does no work in the business, can the spouses co-own the LLC but allocate all profits to one spouse? Is this effective to shift all of the self-employment tax burden to one spouse?

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