Understanding Automatic Orders in a New York Divorce

What Are the Automatic Orders in a New York Divorce?

The Automatic Orders are a set of legally binding restrictions and requirements that apply to both spouses immediately upon the commencement of a New York State divorce action. They are “automatic” because they come into effect without the need for a separate court order. The terms of these orders are found in Section 236 (B)(2) of the New York Domestic Relations Law and NYCRR Sec. 202.16(a). Their purpose is to maintain the status quo and prevent either spouse from taking actions that could harm the other spouse or dissipate marital assets before the divorce is finalized in order to ensure that each party can realize their entitlements at the conclusion of the case. The Automatic Orders become binding upon the Plaintiff upon commencement and binding upon Defendant when a form known as the “Notice of Automatic Orders” is served upon the Defendant contemporaneously with the initial pleadings.

Terms of the Automatic Orders in Divorce

NOTICE OF AUTOMATIC ORDERS (D.R.L. 236)

PURSUANT TO DOMESTIC RELATIONS LAW § 236 part B, section 2, as added by chapter 72 of the Laws of 2009, both you and your spouse (the parties) are bound by the following AUTOMATIC ORDERS, which shall remain in full force and effect during the pendency of the action unless terminated, modified or amended by further order of the court or upon written agreement between the parties:

(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, profiting 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.

Prohibitions and Purpose of Automatic Orders

The statute requires that neither party may:

1. Dispose of Property: Sell, transfer, conceal, or otherwise dispose of marital assets except in the regular course of business, to pay for basic living expenses, or to cover legal fees for the divorce.
2. Change Insurance Coverage: Cancel, change, or fail to renew any existing health, life, automobile, homeowner’s, or renter’s insurance policies. This provision ensures that essential coverage remains in place for both parties and any children involved.
3. Modify Retirement Accounts: Withdraw funds from retirement accounts or pensions, except as required by law or as mutually agreed upon by both parties.
4. Incur Unreasonable Debt: Take on new liabilities or debt that would unreasonably burden the marital estate.

Legal Implications of Violating Automatic Orders

Violating the Automatic Orders can have serious legal consequences. A court may hold a violating party in contempt, which could result in fines or even imprisonment. The court may also order the offending spouse to compensate the other spouse for any losses incurred as a result of the violation. Furthermore, in the context of a contested divorce, a violation of the Automatic Orders can be considered by the court when making decisions about property division, spousal support, or child custody.

Practical Advice for Individuals Going Through a Divorce in New York

If you are facing a divorce in New York, it is essential to understand and comply with the Automatic Orders. Here are some practical tips:

1. Consult with an Attorney: Seek legal counsel immediately upon commencing or learning of a divorce action. An experienced attorney can explain your rights and obligations under the Automatic Orders and help you navigate the complexities of the divorce process.
2. Obtain Consent or Court Permission When Necessary: It is not uncommon for a situation to arise where a party has no reasonable option but to take action that would otherwise violate the Automatic Orders. In those instances, the best practice is to obtain consent of the other party in writing or otherwise seek court approval prior to such action.
3. Document Everything: Keep detailed records of all financial transactions, communications with your spouse, and any other relevant information. This documentation can be crucial if there are disputes about compliance with the Automatic Orders.
4. Communicate Carefully: Avoid making any significant financial decisions or taking any actions that could be interpreted as violating the Automatic Orders without first consulting with your attorney.
5. Cooperate When Possible: While divorce can be adversarial, cooperating with your spouse when possible can help streamline the process and minimize conflict.

Understanding the prohibitions and complying with the terms of Automatic Orders is crucial for protecting your interests during a divorce in New York. When confronted with living life under the automatic orders or when a spouse has violated the automatic orders, you need an experienced divorce lawyer near you offer guidance and advise. Contact us now at the Law Office of Louis L. Sternberg to discuss your divorce and the Automatic Orders.