The party who commences a divorce action is called the plaintiff. When a plaintiff commences a matrimonial action there are several statutory restraining orders that take effect against them immediately. These restraining orders collectively are called the “automatic orders.” The automatic orders take effect against the other party, who is the defendant, when the defendant is served with the summons and complaint, which must include some form of notice about the automatic orders. The automatic orders last throughout the course of the divorce action.

The name “automatic orders” is a bit misleading. There actually is no court order. The automatic orders actually are a detailed statutory prohibition set forth in the Domestic Relations Law regarding transfers of assets that could impair the court’s ability to divide up the marital property in the matrimonial action. This eliminates the need for one party or the other to have to go through the expensive and time-consuming process of requesting that a court impose an order prohibiting the transfer of marital property.

The automatic orders are serious business. A party who violates the automatic orders may be held in contempt of court.

The specific restraints included in the automatic orders are as follows.

(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 matrimonial 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, Keough 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; and

(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.

At any time during the course of a divorce action, the parties may agree to modify the automatic orders to allow one or both of them to make otherwise prohibited transfers. Any such agreement to modify the automatic orders must be in writing, signed by the parties and duly acknowledged.

It is important to remember that these restraints are not absolute. Each party remains free to transfer or dispose of assets (1) in the usual course of business, (2) for customary and usual household expenses, or (3) for reasonable attorney’s fees in connection with the divorce. These exceptions sometimes are the source of serious controversy when one side tries to use these to gain an advantage against the other, such as objecting to the use of a joint bank account to pay counsel fees. If this situation arises, prudent practice is to try to resolve the issue without judicial intervention. If that is not possible, the party looking to access or use funds should at least request a conference with the judge to address the concerns proactively rather than wait for the other party to file a motion. If all else fails, either may ask the court to make a specific modification of the automatic orders. This typically will require a written motion that will take some time and cost both parties a fair amount of money.