How do your marital purpose signatures come off on your forms? If you have hubby and wife both signing the note, and a guarantee and the hubby is 1st signer on our forms he is the only one to sign the marital purpose on both forms. WHY?? I know it has always been that way on our forms but I don't understand why they both shouldn't have to say they are incurring the debt in the best interest of the marriage. Any ideas? Thanks!!

BQ - If I remember correctly...when the WI Marital Property Act was brought into being, when both spouses were signing the note, either could sign the marital purpose statement. On our system the first named signer has their name printed on the statement. I don't think it makes a difference which signs, just so it's signed.

Same deal if they are both guarantors on a business note? I appreciate your input.

Our form has a space for both spouses to sign on the guaranty. Seeing they are both signing the guaranty, I'd have them both sign the marital purpose statement. I don't think it's reguired though. Either could tell us this.

THANKS!!

I have a couple of marital purpose questions.

One is why would either spouse sign a marital purpose statement when they are both signing the note. Isn't that just for when there is only one spouse incurring debt as proof that they are incurring the debt on behalf of their spouse/family?

Another question, I couldn't find anything in the act about whether it applies to only consumer purpose credit. If a small business owner takes out a commercial loan, would this be covered on the basis that his income from the business is community property?

thanks, this stuff is confusing

Pixie

One - Because it's the law. Only one of them have to sign, but it has to be completed if they are WI residents.

If they are personally responsible for the business debt they have to sign a marital purpose. (s/a guarantor) And you would have to send out a tattletale notice too.

BQ, thanks for responding. What confuses me about the first question is that I can't find the "law" that requires this. I read the marital property act, but couldn't find this reqirement. Maybe I missed it. I stuggle with how to explain to the LO's when a marital purpose statement is required because I'm not sure what is law and what is practice.

Pixie

Here is a quote I have from FIPCO and the WBA, it has helped me explain it a few times!
______________________________________________
The Marital Property Act (“MPA”) does not define “in the interest of the marriage or family.” However, the MPA provides that a statement which is separately signed by the applicant spouse at or before the time the obligation is incurred stating that the obligation is “in the interest of the marriage or family” is conclusive evidence of that fact. The form includes such a statement which may be separately signed by the applicant spouse if a Wisconsin resident. The marital purpose statement is limited to Wisconsin residents for two reasons. First, it may be a violation of federal law to inquire about the marital status of a nonresident unless the loan is secured. Second, a marital purposes statement signed by a nonresident spouse would have no legal significance. Even if both spouses sign the note, it may be prudent for one of the spouses to sign the marital purpose statement.

beautiful, thanks jennifer

Pixie

Sorry for intruding, but I just came across this site. I am a Wisconsin lawyer. I represent lenders and borrowers. I suggest you consult with your own counsel; however, if she or he is experienced, she or he will tell you there is no reason to have a marital purpose statement signed if both parties sign the debt instrument or guaranty. It is not the law. In fact, it is not the law even if only one signs the instrument (other than in connection with certain lending programs designed by the government, like WBA loans).

The marital purpose statement is a safe harbor to ensure that you can reach the marital property of both spouses even if the loan is only with one. Without the statement, the non-obligor could argue that the loan was not in the interests of the marriage or family and, therefore, you can only reach the obligor's 1/2 interest in marital property and the oblifgor's individual property. With a signed statement, the non-obligor loses that argument.

Therefore, if both spouses are obligors, there is no purpose in the statement. Moreover, if you do not get the statement signed, it does not invalidate the debt. All it means is, in some loans, you might not be able to reach the non-obligor's 1/2 interest in marital property. I emphasize might because the non-obligor has to prove that the loan was not in the interests of marriage or family. In fact, the law presumes that all debts are in such interest, but it is rebuttable by the non-obligor. Most credit benefits the family.

Finally, I would suggest that you be careful in saying you always require both spouses to sign guaranties. That is illegal under federal law and can invalidate the guaranty.

Just MHO, but I don't really know your specific qualifications as you are not a registered user. The Wisconsin Bankers Association legal department differs to your opinion. Lead Council there says the marital purpose has to be signed. I am not an attorney, nor do I play one on TV, but I do what they say because if it ever comes back on us, we would have them backing us in court as they are the attorney for our forms vendor as well.