New rules in New York for assets in divorce
Former couples confronting the financial consequences of divorce may disagree with Alfred Lord Tennyson’s quip “‘Tis better to have loved and lost than never to have loved at all.”
Some go to extreme measures to avoid or delay personal loss, raiding the marital savings and checking accounts, splurging with family credit cards, even discontinuing health or auto insurance.
In one case pending, a man who earned $218,000 in 2008 stopped paying the mortgage on his family’s home. The house now is in foreclosure, the children are being covered through Medicaid and the wife is receiving food stamps, according to her lawyer, Nathan Van Loon.
Rochester matrimonial attorneys appear to have seen it all.
But a new amendment to New York’s Domestic Relations Law bars divorcing spouses from transferring assets, incurring unreasonable debt or changing insurance coverage while the action is pending.
Chapter 72 of the Laws of 2009 amends Domestic Relations Law [section]236 to provide automatic orders against both parties. A copy of the order must be served by the plaintiff on the defendant with the summons, and becomes binding on the plaintiff as soon as the action is filed and on the defendant, upon service of the summons.
To give effect to the new law, Chief Administrative Judge Ann Pfau (with consent of the Administrative Board of the Courts) announced Tuesday she has added a new [section]202.16-a to the Uniform Civil Rules for the Supreme and County Courts.
The new section is signed by Judge Pfau and dated Aug. 13.
The Office of Court Administration also drafted a form Notice of Automatic Orders (D.R.L. 236) for use by attorneys and pro se plaintiffs. The “notice” will be part of the packet of forms for uncontested divorces available online at www.courts.state.ny.us, under “Forms.”
State Supreme Court Justice John Owens, supervising judge of the Matrimonial Part in the Seventh Judicial District, said tactics such as racking up credit card debts “happen less often than people would think.”
But a non-moneyed spouse does worry, attorney Deborah Indivino, vice chairwoman of the Monroe County Bar Association’s Family Law Section, said Wednesday.
“Last week a [prospective] client said her husband transferred all the savings accounts into his name. He would have to account for that money,” Indivino said.
“Litigants try to hide assets all the time,” Van Loon said.
Transferring funds in anticipation of a divorce also is frowned upon by the court, unless it is done for a good reason.
“The court normally takes notice” of any “dissipation of marital assets,” Judge Owens said. “Sometimes it’s done for very good reasons and very proper reasons.”
If the parties had a large debt, for instance, repaying the debt could be a legitimate reason for making a withdrawal or a transfer from marital accounts.
Parties proceeding pro se rarely request court orders against spending or transferring assets, likely because they do not know the relief is available, Judge Owens said. Seventh District matrimonial judges routinely grant such orders when they are requested.
“I think it’s a good idea to put both parties on notice that they shouldn’t be trying to get rid of assets, or hiding assets,” said June Castellano, a family law attorney and past president of the MCBA and the Greater Rochester Association of Women Attorneys.
She said the statutory language could be confusing, since it refers to “automatic orders” when, in fact, such notice is not signed by a judge.
Van Loon, who is the chairman of the MCBA’s Family Law Section, said confusion could reign: What happens if an attorney or party does not serve the notice? If the defendant does not receive it? What if he or she cannot be bound?
So far this year, more than 1,300 new matrimonial cases have been filed in Monroe County, including 465 contested actions. As of Wednesday morning, there were 935 pending contested cases, according to numbers provided by the court.
The new measure becomes effective on Tuesday, Sept. 1. The MCBA’s Family Law Section is expected to review it at a meeting Sept. 14, and all matrimonial law practitioners are welcome to attend.
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