Know What a Free Trader Form Is
What is a Free Trader Agreement? Perhaps you have heard of or seen North Carolina Form North Carolina Free Trader Agreement, maybe you have without knowing it. The North Carolina Free Trader Agreement is defined in the Code of North Carolina at N.C.G.S. 52-10 and allows a married couple to divide their own separate financial responsibility among themselves and legally disclaim the separate liability. Separating financial responsibility can sometimes be useful for individuals who wish to separate their assets and liabilities from their partners. This is commonly done involving real property only owned by one spouse . Think about if you are married to an individual in North Carolina and you agree to purchase a rental home. As the deal is made to purchase the home, you and your husband does not want the home in your name, only in his name. The bank or lender agrees to lend you and your husband money under certain circumstances. They will, however, require you and your husband to sign a Free Trader Agreement in which you agree your husband will be financially and legally responsible for the mortgage loans issued to purchase the property you and your husband are buying as a married couple.
The Significance of a NC Free Trader Form
A marriage is a partnership – one that commonly leads to the creation or acquisition of numerous types of assets. When it comes to property in North Carolina, this is significant, because even if you are married when property is acquired, in most cases if the property is held in the name of only one spouse, it will only be owned by that spouse. This is true even if the money or other consideration used to purchase the property came from a joint bank account, or if the conveyance deed or sales contract was signed by both spouses. The result is that after separation or divorce, except in certain limited circumstances, one spouse may own property exclusively even if both spouses contributed to the acquisition of the property during the marriage. However, there is a way to overcome this situation, known as a Free Trader Agreement or NC-79 form. This form permits individuals to agree in writing that property, whether real or personal, will be owned separately and free from the legal rights usually afforded to spouses. In other words, if you and your spouse jointly own property that either of you acquires during the marriage, and you want to make sure that after separation or divorce each of you owns only those marital assets that you purchased using your own name or money, a Free Trader Agreement is essential.
How to Get a North Carolina Free Trader Form
The process of obtaining a Free Trader Agreement form in North Carolina is straightforward. The form can typically be found on the website of the county register of deeds office in the county where you plan to do business. Once you locate the form, it’s important to read the instructions carefully and ensure that all the required information is completed. Assuming that you have provided the necessary information, you will then need to sign the form as the applicant, and the signature must be notarized. Next, the completed and notarized form is then filed with the register of deeds office in the county where the form was purchased. This is likely to be the same county in which your business is located, but this may not necessarily be the case. However, the state’s Free Trade Agreement form states that the contract must be filed in the county with the register of deeds where the business’ permanent records are stored. If, for example, you are a traveling salesperson and keep your contract and any other permanent records in Burke County, then you would file the contract there, regardless of where you may be located at any particular time. Once the contract has been filed with the county register of deeds office and the office has confirmed that the contract satisfies the requirements required by law, the contract will be indexed so that anyone searching the index can find the contract and obtain a copy of it by simply asking the register of deeds office to print a copy. The filing fee for recording the contract with the county is usually minimal, usually falling between $5 and $10 dollars.
Filing Requirements and Other Legalities
To ensure that a Free Trader Agreement is enforceable in North Carolina, it must be filed with the Register of Deeds in the county where the applicant does business. If an applicant operates in multiple counties, the FTA must be filed in each applicable county. There is no filing fee for the FTA because it is a government document. Once the FTA is filed, the applicant receives a copy with a "Filed" stamp on it which serves as proof of filing.
It is important that each applicant regularly renews the FTA and files the updated agreement with the Register of Deeds. An applicant must renew the FTA every five years. When renewing the FTA, the applicant should review the information for accuracy, make any necessary changes, and re-file the FTA. Failure to renew an FTA does not impair its effect. However, if the certificate is not regularly renewed, it may be challenged by a third party. If a challenge is successful, it may be removed from the public records and may be ineffective as a notice to third parties. Furthermore, Section 66-71 further states that the filing of a FTA serves as constructive notice. Any purchaser or lien creditor may rely on a copy or certified copy of the FTA that has been filed, even if it has been correctly terminated or has been bound under a new FTA (See N.C. Gen. Stat. § 66-71(h)). A FTA is effective only as to those applicants identified in the form. Changes to a business, a company’s name, its partners or its principals do not bind the FTA unless and until those changes are officially recorded with the Register of Deeds (See N.C. Gen. Stat. § 66-71(b)).
When Is a Free Trader Form Used Often
Understanding Free Trader Agreement NC Form: A Comprehensive Guide
A. Common Uses and Situations
The Free Trader Agreement is commonly used among married couples in North Carolina and they are often reversible, meaning the spouses can make post marital agreements at any time. One common situation arises during a divorce. For example, a marital property agreement may be useful prior to a divorce. The parties may find satisfactory equity in the property without a court action. Exclusively owned property does not always carry subjective value and additional risks. One party may want to resolve the property dispute early on through a free trade agreement. During the time prior to reconciliation or separate property award, the couple can resolve disputed real estate ownership through a free trade agreement. This is an affordable and relatively quick means of resolving an ownership dispute prior to (or sometimes after) divorce. For various reasons a marriage may have ended. Perhaps the parties have been separated for a period of time. If one spouse has built a significant amount of equity in a home by making payments while the other filed bankruptcy , the spouse with a claim to the property may want a free trade agreement to insulate their interest in the property. Not all divorce disputes are resolved amicably. If one party has exclusive use of property the other spouse’s ownership interest may be hemmed in by debts or mortgages. In this case the spouse with exclusive ownership may want to make an agreement with the other spouse to guarantee credit or funds to ensure mortgage payments are made. A marital property agreement will assist the owner of the property isolate other property from his or her spouse, a situation that may occur if the spouses are jointly liable for a mortgage under bankruptcy laws. Bankruptcy and tax planning are also common uses for marital property agreements. When a spouse files bankruptcy, the other spouse may have to vacate the property and lose out on claims to the equity of the other spouse. Similarly, tax laws have an "innocent spouse" provision allowing one spouse to file a marital agreement shielding him or her from joint liability for tax fraud or tax evasion. Other uses may be for estate planning to protect a spouse and avoid probate or to transfer property to children. The free trade agreement can be used to transition assets within the family. Similar to pre-nuptial agreements that help husband and wife protect their separate property, so does the marital property agreement. The marital property agreement helps protect assets in a divorce or separate and protect the spouse’s credit record from a spouse’s debts.
Advantages and Disadvantages of Free Trader Agreements
Understanding NC Free Trader Agreement
The main benefit of a Free Trader Agreement NC is that it allows out of state LLCs and corporations to do business legally within the state of North Carolina without having to formally register with the Secretary of States office. To some, this is a significant benefit as it helps to save a considerable amount of time and money and can also be used to prevent an unfavorable court from asserting personal jurisdiction over a lawful business if sued in the state. Although rare, a potential problem or con for entering into a Free Trader Agreement is that it may be used in fraudulent situations. More specifically, if the real motive behind the Free Trader Agreement is to shield assets—meaning being used in a fraudulent manner—jurisdictions may treat the agreement as null and void.
Expert Insight into NC Free Trader Agreements
Renowned attorney, Mia Williams of Williams Law Firm PLLC, emphasizes the importance of understanding the legal jargon in North Carolina’s Free Trader Agreement. "Too often, people go into these transactions with a cursory understanding of what they’re signing," she explains. "These documents can contain terms that are confusing or even contradictory if you don’t know what the legal language is intended to mean." The lesson, she asserts, is this: "Don’t take shortcuts when it comes to NC Free Trader and Free Trader Agreement forms—even if it means spending a few extra minutes or hours on research or consulting an attorney."
The vast majority of North Carolinians will have no trouble filling out a Free Trader Agreement NC form. Nevertheless, some individuals may face obstacles and require assistance. For example, those who are moving to North Carolina without a permanent address may find it difficult to satisfy the residency requirement or fulfilling the notarization step. Likewise , those who are entering into a free trading arrangement with a spouse may be concerned about their rights without comprehensive, written documentation. In such scenarios, help from a legal professional can go a long way toward smoothing the process.
In addition to securing legal representation, several resources are available to North Carolina residents who are seeking assistance with NC Free Trader and Free Trader Agreement forms. One of the most valuable is the North Carolina Secretary of State website at www.sosnc.gov. In addition to providing extensive information about legal agreements and state requirements, the site contains helpful links and resources that can help prospective signatories avoid pitfalls and associated fees. Another good resource is the North Carolina Bar Association—a nonprofit organization that provides free, trustworthy resources to individuals who require assistance with legal issues.