New York instituted automatic restraining orders a few years ago in reaction to a common practice of many litigants who got served with divorce papers. Their reaction was to immediately empty the bank accounts! Rather than force lawyers to file restrainer orders after the fact or hopefully prior to assets being drained, now the Plaintiff is bound by the orders upon the filing of the divorce and the defendant is bound upon being served. I will first explain what you should and should not be doing, and then discuss what happens if either of you violate the orders.
You are allowed to spend money on “customary and usual household expenses” and “reasonable attorney’s fees”. The idea behind the orders is that you can and are required to maintain the status quo. Assuming your children have always gone to private school and camp, you can still pay for those things. Mortgage and food are also items that fall under everyday living expenses. The list of things you are not allowed to spend on or change is much longer. For instance neither of you are allowed to drop the other or the children from medical or auto insurance policies. You also cannot re-title anything whether it be a car, a home or a bank account. You should also not change beneficiaries on insurance policies and bank accounts. Both spouses are also restrained from taking out additional credit or maxing out existing credit except for “customary and usual household expenses” and “reasonable attorney’s fees”. The caveat here is that you may not do these things unless you have written permission from your spouse, so if you both decide to sell a jointly titled asset during the litigation, there should not be a problem.
What if despite being bound by the orders a litigant does drain an account or change a beneficiary? The courts have the power to force a litigant to reinstate beneficiaries, pay back the funds or face contempt of court. In order for the court to find the litigant who defies the automatic orders in contempt, there has to be a finding that 1. The litigant has knowledge of the order; 2. The litigant has to have disobeyed the order and; 3. The rights of the other party were prejudiced by the violation of the order. In a New York County case the Judge found that despite the husband purchasing a four million dollar house in Connecticut with marital funds, he had not reached the level of contempt as the marital estate was worth Twelve million dollars and he has simply converted a liquid asset into Real Estate. In other words, the wife was still going to get her equitable distribution as he had not dissipated the assets only changed their form. The Judge in that case did admonish the husband for the violation and issued a restraining order from further incidents. Another exception I have seen is in a recent Westchester case where the Plaintiff despite being bound, changed her 401K designation as well as her life insurance beneficiaries during the pendency of the divorce and later committed suicide. The court held that it lacked jurisdiction to enforce the automatic orders and the beneficiaries to their status at the commencement of the action because her death ended the divorce action. Overall, you should feel confident that you are allowed to continue living as you have been, however it is always a good idea to ask your attorney prior to any transaction of which you are uncertain.
