Free Trader Agreement

Good morning,

I am 26 years old. I am currently under contract to purchase a home. Earnest money has been paid, and I am under the due diligence period.

My wife of 6 years and I have been separated since February. There is a current order of child support, custody visitations, and a consent order in place. The consent order addresses how child support will be paid, how visitations will work (holidays etc), as well as gives my ex a vehicle. I thought the order was a separation agreement, however it is just an agreement saying that each party has come to an agreement. My mortgage lender has now, in the twelfth hour, asked me to either have a separation agreement or a free trader agreement in place ASAP so that I may continue to close on the home.

Doing some initial research, it seems that it would be beneficial for both of us to sign the document. I can’t see why she wouldn’t agree to it, seeing as we are months away from divorce, and that there are not any plans for reconciliation. However, from feeling out the situation, I feel that she would not sign this document just to be vindictive. I understand that a court will not force her to sign anything, however, given the circumstances, are there any recourse options for me?

I would be using a USDA loan, with 0% down. My wife has never lived in the home, nor would any marital assets be used in the purchase.

As a side note, we have no existing property or assets for ‘equitable distribution’ which is why I think our divorce attorneys went the child support / visitation route instead.

The funny thing is, I have provided the mortgage lender w/ the support order, a copy of my new apartment lease showing that I am the only person in the house hold, an active 50b order against her, and other documents showing that we are separated, however none of this is enough. I am about to be out about $5000 in earnest money because of my due diligence period expiring. Given that I would be “put out” or “damaged” by her refusing to sign a free trader agreement, do I have any options there?


You do need a Free Trader agreement if you are purchasing the property prior to divorce, the reason being is that your spouse has certain inchoate rights (which arise in the event of your death) as a result of still being your spouse, separated or not. If she refuses to sign a Free Trader Agreement, you may seek a Divorce From Bed and Board, this is a judicially ordered separation and cuts off those estate rights. Unfortunately, this would not happen in time for your closing on your current home. The best thing for you is to do everything you can to persuade her to sign the agreement for you so you don’t lose out on your money.

Crystal, thanks! I talked to a local attorney. They said they could do a Separation Agreement & Property Settlement (SAPS) for $2500-3500 or a Separation Agreement for $350-500. Given that there isn’t any existing property to divide, can I go with the cheaper option? I also asked about divorce of bed and board, and they said 2-3 month minimum and probably $3000+.

Yes, a DBB wouldn’t likely help you with your immediate situation. I cannot advise you which separation agreement service to take, however you need to be sure that your SA will cut off the inchoate marital property rights as that is your main concern moving forward. You should check to see if you have a free trader provision in the SA.