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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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Can’t We Just Pick a Date of Separation and Get Our Divorce?

Can’t We Just Pick a Date of Separation and Get Our Divorce?

Can’t We Just Pick a Date of Separation and Get Our Divorce? We hear this question all the time. The short answer is no, you can’t choose a date of separation. In the real world, efficiency and common sense would suggest that you could. But this is not an agreement to apply for “services” from the government. It is a lawsuit, and a judge must use the law. Divorce is a legal status, similar to a legal status of biological parent in a paternity case, for example. Each state has laws dictating how long a married couple must be separated before they are eligible to divorce. Here in North Carolina, the law requires a one-year separation. This should not be confused with our residency requirement. It requires at least one spouse to live in this state for six months before he or she is allowed to file a claim for divorce, even if the parties have already been separated for a year when one spouse moves here. All Divorces Are Lawsuits It can be easy to forget that even uncontested divorces are filed by a plaintiff, served on a defendant, and ruled upon by a judge. In fact, most people don’t even have to be in court. Except for incurable insanity, the only ground for a divorce in North Carolina is a one-year separation. This requires that at least one spouse intends for the separation to be permanent, although there is no requirement that the lawsuit say which spouse intends to remain apart. Examples of one-year separations that don’t fit into this category are couples who are only separated by military service or incarceration. They are not separated unless one spouse intends to remain separated (i.e., that person does not want to move back home when no longer physically separated). The divorce complaint, the document that starts the lawsuit,  cannot even be signed until the day after the year has passed. When you sign the complaint, you do so under oath, under penalty of perjury, which is a crime. Worse yet, if you lie about the DOS, your fraudulently obtained divorce can be set aside (voided) because you were not separated for one full year. Why Do We Have to Wait a Year? The government doesn’t want you to have a fight with your husband or wife, separate for a few days or weeks, get divorced and then reconcile...

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What Do Judges Consider in Alimony Cases?

What Do Judges Consider in Alimony Cases?

What Do Judges Consider in Alimony Cases? By Amy A. Edwards The factors guide judges in reminding them of the most important things. Either spouse may seek alimony if he or she earns less than the other in North Carolina, although there’s no specific dollar amount that determines by how much less. While we have guidelines in child support cases that compute an amount based on incomes and certain child-related expenses, we don’t have anything of that nature for alimony. Each party prepares a budget as a trial exhibit, which includes income and living expenses. If the judge awards it, the amount of alimony and how long it will be paid is discretionary. Alimony Factors: Incomes/Benefits NC judges must consider a list of factors in alimony cases. The first factor to consider is how much income each spouse has, and sometimes what a spouse has the capacity to earn. Also considered is unearned income, which is not shown on a W-2 statement, such as dividends, rents, retirement payments, disability, social security payments and employment benefits such as medical insurance (and/or dental and vision insurance), retirement benefits, and marital property and debts. Alimony Factors: Each Person’s Situation The court considers each spouse’s individual circumstance, education, age, physical and mental abilities, and emotional conditions. For example, a 25-year-old spouse and a 60-year-old spouse will be treated differently based on medical conditions and the ability to work. Their needs and expectations, such as the anticipated date of retirement or going back to school, also vary. Marital misconduct of either spouse may also be considered. Alimony Factors: History of the Marriage The court also looks at the standard of living that the parties established during the marriage. How long the parties were married and the contribution by one spouse to the education, training, or increased earning power of the other spouse are other factors. One party might have kept the home-fires burning for the last ten years, caring for the children while the other devoted his or her energy to obtaining a degree or advance in a profession, improving the family income. In fact, the statute also requires the judge to consider the “extent to which the earning power, expenses, or financial obligations of a spouse will be affected by reason of serving as the custodian of a minor child.” Alimony Factors: Miscellaneous The court looks at family obligations, such as paying child...

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Digital Privacy: Does Your Separation Agreement Have It?

Digital Privacy: Does Your Separation Agreement Have It?

Digital Privacy: Does Your Separation Agreement Have It? When negotiating an agreement about your divorce, you think of dividing assets like the cars and the house. But people don’t always think about their digital property and privacy. There probably aren’t lots of “boiler plate” paragraphs in separation agreements but you should ask your attorney to address it. What is Digital Privacy? My definition of digital privacy in divorce cases includes your ability to exercise sole exclusive use and ownership of your personal data, be it by key keypad, smart phone or computer. While there are legitimate and lawful purposes for using each other’s personal data, such as applying for social security benefits or filing tax returns, there are many other uses your ex might want to make of your data, even if it is just being nosey. Protected Information A good separation agreement should define what type of information should be protected. Your ex should be required to maintain the confidentiality of your personal data, such as financial records, legal affairs, medical records (including any substance abuse or mental health records), employment, records, and military or school records. Social security numbers, taxpayer identification numbers, passport numbers, date of birth, mother’s maiden name, or any other similar identifying information should be held in confidence. Require other identifying information like your online account numbers and passwords, ATM transactions, your credit report, personal identification numbers (PINs), and info for online shopping web sites such as Pay Pal or Amazon to remain confidential. Posting or other sharing embarrassing and/or sexually explicit or sexually suggestive material should likewise be prohibited. Access and Security of Digital Data  By the time you’ve shared a child or a marriage, you can probably guess each other’s passwords or PIN numbers. Your first plan of attack is to change your passwords and other barriers to access. Get a copy of your credit report and close accounts you no longer use. In the agreement, list examples of what is considered a violation. The most common examples are accessing the other party’s Facebook or other social media account, accessing his or her phone, text or voice mail messages, and e-mail messages. Public Embarrassment and Humiliation  The law related to social media and what can or cannot be used or posted is constantly evolving, as is the technology we use. It can be difficult to determine what is, or is not, acceptable because these issues implicate Constitutional freedom of speech and the definition of what is a crime. There are thousands of situations that could...

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The Top Five Reasons a Divorce Matters in North Carolina

The Top Five Reasons a Divorce Matters in North Carolina

The Top Five Reasons a Divorce Matters in North Carolina By Amy A. Edwards In North Carolina, a spouse can file a claim for divorce only a separation of at least twelve months. Besides the ability to allow someone to remarry, a divorce is important for a number of reasons. This article isn’t legal advice, and it does not cover all of the reasons. But it highlights a few examples of why someone who is served with a complaint absolutely needs to contact a lawyer immediately. Reason #1 – Marital Property Married people who separate can file a claim for equitable distribution, asking the court to divide marital property equally (instead of just relying on which name is on the title or deed). Our state creates a deadline for filing those claims, and the clock starts ticking when a divorce complaint is filed. Failure to properly file for marital property division within the correct time period means it is permanently lost. Reason #2 – Health Insurance Family plans that cover both spouses and any children change the moment a divorce decree is entered. As of that moment, a spouse is no longer “related” for purposes of a family plan because they are no longer a family member. Children of the person who provides health insurance remain on a family plan after a divorce. Reason #3 – Estate Rights Inheritance rights between spouses are completely different from those of non-spouses. This is a very complicated area of the law that can be related to whether a claim for marital property. Examples of potential rights upon the death of a spouse include an allowance of money, the right to a share of the assets if there is no will, and the right to contests a will. Designation as a spouse or former spouse can involve Social Security benefits, military benefits and other survivor’s benefits. Reason #4 – Liens Against the House Married people are sometimes protected from creditors if only one of them created a debt in his or her sole name. For example, the innocent spouse who did not sign a credit card application is usually, but not always, protected from money judgments that would otherwise become a lien against the marital residence. The moment the innocent spouse becomes an ex-spouse, this can trigger a lien against the property even if the debt (such as credit card debt) is not...

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All About Adultery in North Carolina (Part 1 of 2)

All About Adultery in North Carolina (Part 1 of 2)

All About Adultery in North Carolina (Part 1 of 2) By Amy A. Edwards   Merriam Webster defines adulterate as a verb, an act “to corrupt, debase, or make impure by the addition of a foreign or inferior substance or element.” North Carolina alimony laws don’t call it adultery. Instead, adultery as used in alimony cases is a form of marital misconduct called “illicit sexual behavior.” The definition is “acts of sexual or deviate sexual intercourse, deviate sexual acts, or sexual acts defined in NC Gen. Stat. §14-27.20(4), voluntarily engaged in by a spouse with someone other than the other spouse.” NC Gen. Stat. §50-16.3A.   People have argued about which acts between the spouse and third party meet the definition of illicit sexual behavior. In 2011, a wife unsuccessfully argued that her behavior didn’t meet the standard of illicit sexual behavior because the man she had been with wasn’t able to complete the act they had started but were unable to finish. Romulus v. Romulus (2011). The Romulus case gives an exhaustive list of definitions (starting on page 47) of various acts. Adultery and Alimony In North Carolina, divorce is a “no fault” process based on a full year of separation between a husband and wife. However, we strongly cling to fault in our alimony laws. For many reasons, alimony can be awarded based only on finances, meaning incomes and reasonable living expenses. But if the supporting spouse commits adultery, he or she automatically has to pay alimony. The reverse is also true. The dependent spouse automatically loses alimony if he or she cheats. Other types of marital fault are only factors the judge must consider, and they don’t demand a particular result as adultery does. If both spouses have cheated, the judge then denies or awards alimony in his or her discretion “after consideration of all of the circumstances.” NC Gen. Stat. §50-16.3A. How Do You Prove Adultery? Adultery is almost always a circumstantial case. After all, most spouses aren’t advertising their infidelity. It is rarely proven by direct evidence. Therefore, our law resorts to a standard called the “inclination and opportunity doctrine.” Owens v. Owens, 28 NC App 713 (1976). This means the spouse alleging adultery must prove two things. First, was there an opportunity for the spouse and third party to be together in privacy?  Second, if they had the opportunity to be together, were they inclined (likely) to have sex?   Like any other disputed fact, witnesses may...

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