Free Trader Clause


#1

I am currently seperated and thinking of filing for divorce. My soon to be ex has signed a free trader agreement that am yet to file in court. I have also have him sign a form allowing our only child as my beneficiary of my 401k. I have few questions though:

(1) Since he has signed free trader, can I open bank accounts on my own without him claiming my savings later. We have never had joined bank accounts together even when we were married.

(2) We did not have any properties that we acquired in the marriage and if I buy a house now can he claim that the money I used to but the house was marital property even though he signed free trader. I dont and I have never asked for his money.

(3) Since he signed my 401k to my daughter and my 401 plan administrator accepted the signed consent form, can he come and claim my 401k later when we divorce? Also since I did not sign any consent form allowing my child or someone else to be the beneficiary of his 401k or any retirement accounts, can I claim his 401k or retirement money?


#2

A Free Trader Agreement, or Free Trade Agreement is a document which allows persons who are married but separated to purchase real property (real estate) without their spouse having right to the same. In NC by reason of marriage there are certain rights a spouse has in the other’s real estate simply by reason of the legal relationship between them. These rights attach to any real estate purchased during the marriage. Free trade agreements are used to vitiate these rights and allow each spouse to purchase property as if they were unmarried. These documents are used most often during the one year period of separation, as the parties no longer wish to be married, but are ineligible to file for divorce until the one year and one day of separation has passed.

Free trader agreements only affect property rights as they pertain to real property (land, houses, etc.), not bank accounts. You can buy the house if you have a free trader agreement- please be aware though that the funds you use would count against you in the eventual equitable distribution. You are buying the home separately but if you are buying the home with marital assets, it will still be subject to ED.

If you are already separated, then he would have no claim on monies you put into a separate bank account, unless it was marital money, like with the house situation above. Your separate bank accounts (the amounts in them at the date of separation) can still be considered in an equitable distribution claim when analyzing the entire marital estate.

I would have to review the 401k consent form to tell you whether or not he could still claim any of that money. You may be protected with what you have. However, it would still be better for you to get a separation agreement wherein he explicitly agrees to not seek any of your retirement accounts in the divorce. This will protect you completely. And yes, you can seek half of the money he invested into his retirement accounts during your marriage, even if he agrees not to seek yours. Remember though that equitable distribution needs to be filed before the divorce is finalized.