The importance of first impressions in matrimonial actions cannot be overstated. Prior to a court appearance, your attorney has undoubtedly advised you regarding what to wear, what to say or not say, what to bring and how to conduct yourself before the judge. Throughout the action, there is an expectation that both parties (and his/her attorneys) will act in a civil, reasonable and cooperative manner. In fact, this expectation is set forth even prior to the assignment of a judge in the action in a document entitled “Automatic Orders Pursuant to Domestic Relations Law Sections 236(B)(2)(a) and (b).” This document is annexed to and served with the documents which commence a matrimonial action in addition to other required notices. In essence, it serves to warn both parties, with specificity, to maintain the status quo in connection with the marital estate during the divorce action.
The statute, in relevant part, sets forth the following:
(1) Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of, without the consent of the other party in writing, or by order of the court, any property (including, but not limited to, real estate, personal property, cash accounts, stocks, mutual funds, bank accounts, cars and boats) individually or jointly held by the parties, except in the usual course of business, for customary and usual household expenses or for reasonable attorney’s fees in connection with this action.
(2) Neither party shall 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, 401K accounts, profit sharing plans, Keogh accounts, or any other pension or retirement account, and the parties shall further refrain from applying for or requesting the payment of retirement benefits or annuity payments of any kind, without the consent of the other party in writing, or upon further order of the court.
(3) Neither party shall incur unreasonable debts hereafter, including, but not limited to further borrowing against any credit line secured by the family residence, further encumbrancing any assets, or unreasonably using credit cards or cash advances against credit cards, except in the usual course of business or for customary or usual household expenses, or for reasonable attorney’s fees in connection with this action.
(4) Neither party shall cause the other party or the children of the marriage to be removed from any existing medical, hospital and dental insurance coverage, and each party shall maintain the existing medical, hospital and dental insurance coverage in full force and effect.
(5) Neither party shall change the beneficiaries of any existing life insurance policies, and each party shall maintain the existing life insurance, automobile insurance, homeowners and renters’ insurance policies in full force and effect.
The Automatic Orders are meant to protect prejudice to either party from financial shenanigans during a divorce action, preserve the marital estate and prevent unfair advantage to either party. As such, it prohibits either party from actions such the transfer, concealment, dissipation or other disposal of assets during a divorce. It also prohibits either party from accruing debt for which the other would be responsible and directs that both parties refrain from making any changes to beneficiary designations and/or insurance policies.
The implications of violating the Automatic Orders are the same as with any other order during a matrimonial action. Thus, non-compliance with this Order, without further court order or agreement by the other party, exposes a litigant to the remedies associated with contempt of court, including but not limited to an award of counsel fees to the other party.Significantly, non-compliance with this Order also provides the Court with its first insight into the character and credibility of the contumacious party, which once determined, is hard to change.Thus, it is critical that a party understand the critical importance of this Order and ask his/her attorney to explain any misunderstandings