Q: I bought some land with a married friend of mine. He has been separated from his spouse for two years, but not legally separated.
I put down 25 percent of the purchase price and he paid 75 percent of the purchase price directly into escrow.
The title to the property is solely in my name. Does his wife have any legal claim to the property?
A: Your partner’s wife might well have a legal claim to the property, despite your friend’s obvious attempt to hide marital assets.
Did you document the transaction in any way? Is there a partnership agreement between you and your friend regarding this investment? If so, and possibly even if there isn’t a written agreement, she may have an interest in the partnership that controls the land. Depending on how marital property laws are written in your state, she may even have an ownership interest directly in the property. Finally, if your friend has a claim against the property for the money he paid, then his spouse may as well.
It sounds like your friend trusts you more than his wife, especially if you have a handshake agreement. But I’d be careful, as this arrangement could certainly come back to haunt you, especially if she sues him for hiding marital assets. Litigation can be very expensive, time-consuming and heart-breaking, and I can easily imagine how her divorce attorney could make your life miserable.
But then again, what are friends for? Please talk to a real estate attorney who can advise you further.
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