Free Trader Agreement - Something Other than NAFTA

A Free Trader Agreement as it relates to North Carolina property law has little to do with NAFTA (North American Free Trade Agreement) or the exporting of goods and services between countries. Rather, it is a useful tool to allow spouses to own and convey property independent of the each other. A well drafted agreement will also ensure that the parties waive martial rights that they may otherwise hold as a result of their marriage to their spouse. While the terms of such agreements vary they normally do include the following:

  1. The parties agree that “free trader spouse” can buy, sell or otherwise deal with real estate without the consent, joinder or interference of the other spouse. 
  2. The “non-owner spouse” will waive any legal or equitable right to any interest in property subsequently obtained by the free trader spouse. 
  3. The spouse who will be acting as a Free Trader will agree to hold the non-owner spouse harmless from any liability relating to real estate the free trader spouse obtains. They also typically agree to indemnify the non-owner spouse from liability as a result of the Free Trader’s ownership of the sole and separate property.
  4. Agreements relating to the waiver of any rights vested in the non-owner spouse pursuant to provisions of North Carolina’s General Statues that vest marital rights or interests in or to the non-owner spouse in the property are also included.
  5. Provisions explaining the intention of the parties to sever the tenancy by the entirety in the property or otherwise vest title solely in the name of the free trader spouse will be outlined.

Again the above are merely “some” of the usual provisions found in Free Trader Agreements. It should be understood that there are particular nuances that may be involved in premarital scenarios or in those cases where the parties are separated. Further, while a properly drafted, executed and recorded agreement would allow for one spouse to effectively convey an interest in the property they own without the joinder of their spouse, a poorly drafted agreement could create difficulties and delays in future dealings with one’s property. I doubt I could over emphasize the extreme importance of seeking knowledgeable legal advice when it is determined that a Free Trader Agreement is needed. The attorneys at Hutchens Law Firm will be pleased to assist you if you find yourself in need of such an agreement in the future. 

Published by Wendy Hughes on February 3, 2017