When clients are served with divorce papers, they are often confused about why there is a restraining order included. They may have done nothing to necessitate a restraining order, and can become concerned with how they are going to pay for things like a mortgage or expenses involving children.
Several years ago, New York instituted automatic restraining orders in reaction to a common practice of many litigants who got served with divorce papers – they would immediately empty the bank accounts! Rather than force lawyers to file restraining 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. Under the orders there are certain things you should and should not be doing, and there are consequences if either party violates them.
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 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 had simply converted a liquid asset into real estate. In other words, the wife was still going to get her equitable distribution, because he had not dissipated the assets and only changed their form. The Judge in that case did admonish the husband for the violation, and issued a restraining order to prevent further incidents. Another exception was in a Westchester County 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 because the Plaintiff’s 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 consult your attorney prior to any questionable transaction during a divorce proceeding.
Deborah E. Kaminetzky, Esq.
Kaminetzky Law & Mediation, P.C.
670 Long Beach Blvd., Suite 205,
Long Beach, New York 11561
- Posted by Deborah E. Kaminetzky
- On September 22, 2016
- 0 Comments