How are Assets Protected During a Divorce?

  •   |   Meghan Freed

 How are assets protected during a divorce?  It’s a common question given that sometimes spouses fear that their spouse will spend, retitle, or move assets while a divorce is pending.  Others fear that their spouse will incur large debts.  Connecticut protects assets during divorce in two main ways.  First, Connecticut courts attempt to prevent it from happening in the first place via the automatic orders.  Second, judges can take it into account when dividing property at the end of a divorce.

Read on to learn more.

Automatic Orders & Asset Protection

We refer to the court orders that go into effect automatically at the beginning of a divorce, legal separation, custody, or visitation action as the “automatic orders.”  There is a lot of emotion and uncertainty at the beginning of a divorce and other family law cases.  The purpose of the automatic orders is to maintain the status quo with regard to the spouses’ finances, property, and children.

Read: What are the “Automatic Orders” in a Connecticut Divorce?

What the Automatic Orders Prohibit

Concerning property, the automatic orders prevent both spouses from taking actions that would drastically affect the couple’s property without the other spouse’s consent, including:

  • Sell, exchange, take away, give away, or dispose of any property without written agreement with the other party or a court order except in their usual business or for usual expenses for the home or for reasonable attorney’s fees in the case.
  • Hide any property.
  • Mortgage any property except in their usual business or for usual expenses for the house or for reasonable attorney’s fees for the case without a written agreement or a court order.
  • Have any asset or an asset that both parties own become owned only by him or her without a written agreement or a court order.
  • Go into unreasonable debt by borrowing money or using credit cards or cash advances unreasonably.
  • Change the terms or named beneficiaries of any existing insurance policy or let any existing insurance coverage end, including life, automobile, homeowner’s, or renter’s insurance.
  • Deny the use of the family home to the other person without a court order if the spouses are living together on the date the court papers are delivered.

How the Automatic Orders are Enforced

Sometimes a spouse violates the Automatic Orders.  If this happens, you must affirmatively bring it to the court’s attention, usually by filing a Motion for Contempt of the Automatic Orders.  To hold your spouse in contempt, the court must find that your spouse willfully violated the terms of the Automatic Orders when they were in effect.  In some limited circumstances, the judge may even extend its contempt ruling to include a time period prior to the date of service of the Automatic Orders.  This typically occurs if the court finds that the spouse committed the act when contemplating divorce.

Read: What is a Motion for Contempt?

Other Proactive Steps to Protect Assets During Divorce

In addition to Automatic Orders, there are a few other tools to protect assets during a divorce.

Property Division

One of the factors Connecticut courts consider when distributing property between divorcing spouses is each spouse’s contribution to the acquisition, preservation, or appreciation in value of their respective estates.  As a result, a court may consider one spouse’s wasteful or inappropriate spending a dissipation of assets resulting in the other spouse receiving a credit in the final allocation of the marital estate.

Read: What Factors Are Considered When Dividing Property in a Connecticut Divorce?

What is Considered a Dissipation of Marital Assets

Not every significant expenditure constitutes a dissipation of marital assets.  The test is whether an asset was actually wasted or misused.  Significantly, that means that the spouses’ disagreement about spending doesn’t mean it was a dissipation.  The court generally needs to see some form of financial misconduct about spending unrelated to the marriage.  For example, gambling, spending on a girlfriend or boyfriend, hiding assets, or transferring assets to someone else without sufficient compensation.

Read: What is Dissipation of Marital Assets?

Read: How Does Infidelity Affect Property Division?

What if My Spouse is Hiding Assets During Divorce?

Sometimes a spouse’s fear isn’t that their ex will spend, retitle, or move assets, but that their spouse will hide assets while a divorce is pending.  There are multiple ways that Connecticut addresses this — the first by preventing it from happening in the first place via the automatic orders, the second by requiring disclosure on the financial affidavits, and the third by providing a way to reveal any hidden assets via the discovery process.

Read: What if My Spouse is Hiding Assets During a Divorce?

The Comprehensive Connecticut Property Division Guide

How to divide property is one of the most critical issues in divorces.  And, it’s one of the most confusing.  There are no set formulas or rules on how property will be divided.  The good news is that it creates tremendous flexibility for experienced divorce attorneys to craft an individualized approach.  To prepare to make solid and informed decisions, you need to understand how property division works.  Our Comprehensive Connecticut Property Division Guide tells you everything you need to know about property division in Connecticut.

Read: Property Division: The Comprehensive Connecticut Guide

Next Steps

To start making a plan for your divorce, reach out.  Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals.  We analyze those goals, plus the facts of your case, and present you with recommendations and options to move forward.

Schedule your Goals & Planning Conference today, or contact us here. 

Freed Marcroft LLC

Freed Marcroft LLC
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