Under the New York Domestic Relations Law, court orders limiting spouses’ ability to transfer assets automatically take effect the moment a divorce complaint is served. The orders remain in effect throughout the divorce action unless they are terminated or modified by the court. Those orders are:
• Neither party can sell, transfer, encumber, conceal, assign, remove or in any way dispose of any property — including real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats — that is individually or jointly held by the parties.
• Neither party can transfer, encumber, assign, remove, withdraw or in any way dispose of any tax-deferred funds, stocks or other assets held in any individual retirement accounts, 401(k) accounts, profit-sharing plans, Keogh accounts or any other pension or retirement account, and the parties must not request the payment of retirement benefits or annuity payments of any kind. (A party who is already receiving such payments may continue to do so.)
• Neither party can incur unreasonable debts, including further borrowing against any credit line secured by the family home, further encumbering any assets or unreasonably using credit cards or cash advances against credit cards.
• Neither party can remove the other party or the children of the marriage from any existing medical, hospital or dental insurance coverage, and each party must maintain any such existing coverage.
• Neither party can change the beneficiaries of any existing life insurance policies, and each party must maintain any existing life insurance, automobile insurance, homeowner and renter insurance policies.
To transfer any property that falls under these automatic court orders before the divorce is final, you must obtain the written consent of your spouse or a court order. The only exceptions to the ban on reducing assets and increasing debt are:
• Expenses incurred in the normal course of business
• Usual household expenses
• Attorney’s fees incurred in the divorce action
The attorney and staff at the law offices of Lauren B. Abramson help you determine what financial transactions are permissible while your divorce is pending.