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Free-Trader Agreements in North Carolina

Free-Trader Agreements in North Carolina

Free-Trader Agreements in North Carolina When a married couple separates, if they can reach an agreement on all of the issues between them, they may choose to sign a separation agreement. It is a contract that says how they have agreed to divide property and debt, how family support will be provided, if any, and what they will do about parenting time if they have children together. One of the usual terms contained in it is a free-trader-agreement (FTA). If there is no separation agreement, an FTA can be a short contract by itself. What’s the Problem? Many couples own real estate when they separate. After time passes but before the divorce is granted, some people consider home ownership. When married couples acquire a mortgage loan, both usually sign the promissory note, which means they both have a legal obligation to make mortgage payments. That’s pretty straightforward. But when only one spouse signs a promissory note, only he or she owes the money. To oversimplify the problem, if the home-owner dies before becoming divorced, the surviving spouse has no legal responsibility to make the mortgage payments. But regardless of the fact that a married couple is separated, as a spouse, the non-home-owner would still have certain inheritance and survivorship rights to the property. Remedy #1 – Free Trader Agreement Mortgage lenders require parties to sign an FTA, which is an agreed-upon right to buy (i.e., trade) freely (i.e., without interference). Mortgage lenders lend money to buy a home that will be theirs if they foreclose on the loan. They don’t want to share any ownership of the home with the surviving spouse (who isn’t obligated to make mortgage payments). The purpose of an FTA is for the spouse who is not buying the home agrees to waive all claim to it, including inheritance and/or survivorship rights. Usually recorded on public record at the office of the Register of Deeds, these contracts clarify that the spouse buying the home has exclusive ownership of it, even though he or she is married. Because the FTA is a contract, both parties must voluntarily agree to sign it.  Remedy #2 – The Divorce When a divorce decree is granted, the other person is no longer a spouse, so the mortgage lender no longer has the problem of an ex who is still a surviving spouse even if they were separated for some time when the home was...

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What is Marital Property in North Carolina?

What is Marital Property in North Carolina?

What is Marital Property in North Carolina? Before 1981, our state had traditional title ownership. This meant that the assets would be awarded to the person in whose name they were owned if a couple divorced. If the house or vehicle was in the husband’s name, for example, the wife received no share of the value for it. Reform: Equitable Distribution Some states have what they call community property. Instead, we use a process known as Equitable Distribution to divide marital property. After a particularly harsh result in a 1979 case that demanded reform, an equitable distribution statute was created, NC Gen. Stat. §50-20. Title ownership was fairly straight forward, but the newer process has lots or grey area. Instead of strictly using the law to simply look at the name on the deed or car title, the statute requires judges to divide property fairly (i.e., equitably) between spouses. When the court decides property is marital, it is given to (i.e., distributed to) one spouse or the other, even if his or her name is not on the title or other ownership title. Equity gives the judge discretion to award assets as he or she sees fit, so long as it is within the terms of the law. The law requires judges to divide marital property equally unless one uses his or her discretion to do otherwise when there are special reasons. Marital Property Definition Marital property includes land and personal property that is acquired by either or both spouses during the marriage but before they separate. It must also be owned at the time they separate. If it meets these requirements, the property is legally presumed to be marital. In other words, if a spouse wants to show that property is his or her separate property, he or she must prove it is separate property. To beat the legal assumption that it is marital property, he or she must prove the property was acquired before they married, after they separated, or acquired by a spouse by devise (property transferred by a will) or by descent (property inherited upon death). What Counts as Property? The current statute includes just about everything with a dollar sign on it, and a few things that don’t have any real value, such as photo albums, or even a negative value such as an overdrawn bank account. Other examples you might not think of include cemetery property,...

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The Trial: A Chaotic Experience

The Trial: A Chaotic Experience

The Trial: A Chaotic Experience No matter how prepared you and your attorney are, the days before a trial are frantic and stressful. A good case can be like a work of art. At first glance, it can look flawless but when you stand back and tilt your head, there are always a few more minor adjustments to be made before it is seemingly perfect. But trials are not perfect. Nor are they a color-by-number picture with a beginning and an end brightly mapped out. Instead, trials are organic. How are Trials Organic? Trials are organic because they take on lives of their own. After the first hour or two in the courtroom, a rhythm usually develops, which can offer a little more comfort. Trials are never what you (or your attorney) expect. Perhaps they will be better or worse, but they rarely stick to the script. Human nature means life is fluid . . . and messy. Because life doesn’t have a pause button, new events are constantly taking place right up to the day of the trial. The Human Factor No two trials are the same, nor are they made up by the same cast of characters or backdrop. Besides the fear of the unknown, the parties have the pressure of court staring them in the face. Stress and tempers can flare between the plaintiff and the defendant. Last-minute blow-ups between the parties and extended family members can impact the direction of the trial too. One or both of the attorneys might be completely unaware of some major problem that just unfolded on the day before court. The script is sometimes scrapped early in the trial because of the unexpected testimony of a witness or two. In that event, your attorney must improvise, playing it by ear. The Attorney Approaching trial dates can cause people to reconsider whether they want to attempt settlement. It is common for clients and their attorneys to be in touch with the opposing party all through the late evening on the eve of court. While the attorneys are tending to last minute details of trial preparation, if their clients want to negotiate and settle the case, they might draft the settlement documents at the same time with the hope that their time has been well-spent and that the parties will sign it the next morning. Time is a luxury most attorneys don’t have....

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What Do All Those Child Custody Labels Really Mean in NC?

What Do All Those Child Custody Labels  Really Mean in NC?

What Do All Those Custody Labels Really Mean? Physical Custody By Amy A. Edwards  See also – Legal Custody Physical Custody In this article, we focus on physical custody and visitation.Our state deems physical custody to mean “the physical care and supervision of a child.” NC Gen. Stat. §50A-102(14). The NC Child Support Guidelines identify primary physical custody as the custody a parent has when he or she spends 243 overnight visits per year with that child. The other parent has secondary physical custody because he or she has 122 or fewer overnights. In that case, child support is the same amount no matter what the custody schedule is. But if a parent has 123 or more overnight visits per year, a different calculation is used. Depending on the exact number of overnights per year, the child support obligation changes on a per-day basis. Physical or Legal Custody? The Guidelines are careful to note that primary physical custody is determined without regard to whether a parent has primary, shared, or joint legal custody (decision-making custody), which is the right to make significant long-term decisions, such as a child’s religious training or the school a child will attend. Contrast that with physical custody, which involves the day-to-day decision-making such as what bed-time is best or how much time a child may spend using social media on a school night. Visitation With a Child Our state fails to clearly define visitation, stating that: Unless a contrary intent is clear, the word custody shall be deemed to include custody or visitation or both. The Court of Appeals wrote that “Visitation privileges are but a lesser degree of custody. Thus . . . the word custody . . . was intended to encompass visitation rights as well as general custody.” NC Gen. Stat. § 50-13.2(b1) But the statute specifies who cannot have visitation. If a person conceived a child by acts of various sexual assault laws, he is not entitled to visitation rights. On the other hand, grandparents may file a case visitation, not custody of any sort. However, they may seek visitation only if there is an on-going custody battle already pending in court. This avoids the significant stress and cost of litigation which could otherwise be inflicted upon the parents by a third party. What About Technology?  Judges in North Carolina may award “electronic communication” with a parent. To allow a fluid and meaning as technology changes, the law envisions “contact, other than...

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Clients and Attorneys Going in Different Directions: Marital Fault or Bad Behavior by the Other Parent

Clients and Attorneys Going in Different Directions: Marital Fault or Bad Behavior by the Other Parent

Clients and Attorneys Going in Different Directions:  Marital Fault or Bad Behavior by the Other Parent In the Beginning . . .  By the time someone talks with an attorney about a divorce or a custody case, it is safe to say that it isn’t because something great just happened. Most people are struggling to make sense of what has just happened to them, or what finally became the last straw. Clients are devastated, shocked, angry, traumatized and anxious to vent about how the other person has betrayed and hurt them. Each case is unique but this article is a general response to a common question that clients ask me: Why are we worrying about this [insert something that’s tedious and dull] when I can prove my ex did [insert something that’s awful and life-changing]. What’s Your Attorney Doing? Meanwhile, after you have bared your soul to the attorney and handed a check or credit card to the receptionist, the attorney and his or her staff members are doing lots of busy-work.  All they appear to be doing is wasting time, filing court paperwork, gathering tons of financial records, drafting financial affidavits (budgets for court), listing details of property and debts, and perhaps doing discovery and then mediation. Clients quickly become disappointed and frustrated once they discover that fault and bad behavior won’t usually be addressed in depth until after all of that is completed, and then a trial. Unfortunately, it can easily take a year after you start the court process for a judge to make the final ruling on your case.   What Are Your Attorney’s Priorities? It might seem like your attorney isn’t really listening to what’s important to you, or that his or her goals appear to be at odds with yours. This legal process is backwards in the sense that clients have to deal with serious emotional turmoil and upheaval at the beginning of a case, but your attorney must work with an eye towards the end of a case. This means that the attorney might have to set aside what’s right and wrong at the beginning of a case to start building a foundation for the case before reaching those matters. One of the hardest lessons I learned upon my arrival at law school was that courts don’t dole out justice. In fact, they usually don’t focus on justice. Instead, courts apply the law to the facts of each case. The law must be your attorney’s priority. Attorneys...

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What Do All Those Custody Labels Mean? Legal Custody

What Do All Those Custody Labels Mean? Legal Custody

What Do All Those Child Custody Labels Really Mean? (Part 1 of 2) This article focuses on legal custody. Parents will fight tooth and nail about what kind of custody each of them should have. They are extremely concerned about the term custody. There are many parenting labels including visitation, joint custody, sole custody, physical custody and legal custody. Our state statute doesn’t help much. In fact, it probably creates more confusion. NC Gen. Stat. §50-13.1(a) states: Unless a contrary intent is clear, the word “custody” shall be deemed to include custody or visitation or both.” However, our case law and the NC Child Support Guidelines do give us more details about those labels. I’ve tried to avoid legalese, but some of it is inevitable. Our Changing Values  Unlike some states, our state law doesn’t start by assuming that any particular type of custody will exist. But a few years ago, it came just shy of it when the state policy was written to promote “child-centered parenting . . . and encourage . . . court practices that reflect the active and ongoing participation of both parents in the child’s life and contact with both parents when such is in the child’s best interest…” NC Gen. Stat. §50-13.01. This was significant because it wasn’t too many years ago that courts almost automatically gave moms custody of young children. The now debunked law of traditional custody, called the Tender Years Doctrine, assumed young children of tender years should be with their mothers if at all possible. Now, if either parent requests joint custody, the court is legally obligated to consider it. NC Gen. Stat. §50-13.2(a). Legal Custody (Parenting Decisions) Legal custody is decision-making custody, the right to make significant long-term decisions that impact a child’s life and welfare, such as a child’s education, health, medical care, discipline, and religious training, to name a few. Contrast that with physical custody, the day-to-day decision-making such as what bed-time is best or how long a child may spend on social media on a school night. There are three types of legal custody. Joint Legal Custody The trend these days is to award joint legal custody to parents, meaning that both parents equally share the decision-making. Ironically, when parents share joint custody, neither parent can veto the other, so neither parent really has any more rights to make a decision than the other. But, the system of checks and balances provides some incentive for decent behavior. If one parent acts badly or makes poor decisions,...

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