Free Trader Agreements Explained!
In North Carolina, when married couples separate, they are required to live separate and apart for one year prior to filing for an absolute divorce. North Carolina is an Equitable Distribution state, which means that real and personal property acquired by either party during the course of their marriage is subject to be divided between the parties throughout their divorce proceedings.
When parties have acquired a piece of real property during their marriage, many people choose to sell the marital home and split the proceeds, while others decide it is best for one spouse to remain in the marital home and buy out the other’s fair share of equity. Either choice requires at least one of the parties to find a new residence. Many people are hesitant to rent during their separation period and want to invest their money in a newly purchased home. That hesitation has been exacerbated in recent years due to a steady incline in rental prices. The cost of rent has increased by 20% on average in North Carolina in just one year, and if you couple that with the rising costs of goods, including gasoline and groceries, renting is no longer a practical financial option for many people. This often leads to the question, “Can I buy a new house after I separate from my spouse?”
While you can purchase a home during the one-year separation period, there are steps you should take prior to that purchase to insure the new property stays separate property and is not included in the division of marital assets during the divorce. This can be accomplished with a Free Trader Agreement.
A Free Trader Agreement is a legal document that allows a spouse to “freely trade” which includes purchasing real property after separation without needing to place the soon to be ex-spouse on the deed. Legally speaking, these Agreements allow a spouse to purchase real property in their own name, without creating a marital interest in the property or giving the other spouse rights to the property. If purchasing real property after the date of separation, the Free Trader Agreement.
Free Trader Agreements can be executed as a standalone agreement, or as part of a Separation Agreement. Whether standalone or included in a Separation Agreement, they should be recorded with the Register of Deeds in the County in which the real property was purchased.
If you are separated and contemplating buying property, talk to an experienced divorce lawyer. Not only can they help you understand the process of equitably dividing all of your marital assets, but they can also help you protect your future assets and your best interests.