ATROS 101: WHAT YOU CAN & CAN’T DO ONCE DIVORCE PAPERS ARE FILED

 

            When people hear the term “restraining order,” they often associate it with wrongdoing or punishment. Put simply, a restraining order is a legal tool designed to protect a party or parties by limiting certain actions during a legal case.  In family law, this protective tool takes the form of Automatic Temporary Restraining Order (ATROS). Often overlooked or misunderstood, ATROS automatically take effect on both parties once a summons is served in divorce, legal separation, annulment, or paternity cases, and are legally enforceable by the court.  The purpose of ATROS is to preserve the status quo and prevent either party from taking unilateral actions—such as transferring assets, changing insurance coverage, or relocating with children—that could negatively impact the other party or the outcome of the case during the pendency of the proceedings.

            The ATROS that apply in California family law proceedings are set forth in Family Code Section 2040. These statutory restrictions and obligations are reproduced in full on the reverse side of the Summons (Family Law Form FL-110), which is served with the Petition initiating the court action. Because the ATROS are printed on the back of the Summons they can be overlooked. However, these orders are critical binding legal obligations that both parties must comply with for the duration of the court proceedings. Violations can lead to significant legal consequences, including sanctions, contempt of court, or unfavorable rulings.

What do ATROS Prohibit?

            Removing Minor Children from the State– Neither party may remove any minor child(ren) of the relationship from the state of California without the prior written consent of the other party or a court order.

            Exceptions: This restriction does not apply if the child was already residing outside California at the time the petition was filed.

            Transferring, Encumbering, Hypothecating, Concealing, or Disposing of Property-Neither party may transfer, sell, encumber, conceal, or otherwise dispose of any property—whether it is community, quasi-community, or separate property—without the written consent of the other party or a court order, except: In the usual course of business, or the necessities of life.

            A party is not precluded from using community property, quasi-community property, or the party’s own separate property to pay reasonable attorney’s fees and costs to retain legal counsel in the proceeding. However, any use of such funds must be fully disclosed to the other party and properly accounted for.

            Examples of prohibited conduct:

• Taking a loan out against community property
• Pledging community property as collateral
• Closing a joint bank account and transferring the funds to a separate account or spending the funds without the other party’s consent.
• Hiding assets
• Selling or disposing of assets

            Modifying Insurance or beneficiaries– The parties are prohibited from cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability insurance, held for the benefit of either party or for the benefit of any child or children for whom support may be ordered.

            Altering Estate Plans – ATROS aim to freeze your estate plan and maintain the status quo for the protection of both spouses and their children while the division of marital assets is in progress. You can revoke existing trusts (and sever existing joint tenancies) only after notice is served on your spouse, and you are not allowed to transfer assets to trustees of new trusts (who might not be subject to the court’s jurisdiction) except with the express consent of the other party or by order of the court.

            Exceptions: You can create, modify, or revoke a will, create but not fund, a new single-settlor trust, and file a disclaimer of an inheritance unilaterally without notice or consent.

Why It Matters if you Die During a Divorce Proceeding

            Death Before Entry of Judgment Terminating Marital Status. If you should die before entry of a status-only judgment, the Family Law Court would lose jurisdiction over all issues, except those already adjudicated. Under these circumstances, your share of the community property and all of your separate property would pass as if the Petition for Dissolution of Marriage had not been filed. Thus, your assets would pass to the beneficiaries of your current estate plan, usually your spouse. If you do not have an estate plan, your estate would pass through probate, and your spouse would receive all the community property and a portion of your separate property. Any nonprobate assets, such as retirement assets and life insurance plans, would pass to your designated beneficiaries.

            Death After Judgment Terminating Marital Status. If you should die after a status-only judgment that expressly reserves jurisdiction over the remaining issues in the case, the Family Law Court would retain jurisdiction, and the property division would take place there. The Executor of your will be substituted in your place, and the Family Law Court will retain jurisdiction to decide the remaining issues in the case. Death after a status-only judgment also has a very different impact on how your estate would be distributed. A judgment of dissolution automatically terminates nonprobate transfers between former spouses, including trusts and beneficiary rights under retirement plans. It also terminates the right-of-survivorship interest in joint tenancies and community property with right of survivorship. Unless the respective wills provide otherwise, the judgment also revokes all testamentary transfers between former spouses and any provision in a will nominating the former spouse as trustee, conservator, or guardian. However, a judgment of dissolution does not terminate the surviving spouse’s rights as a designated beneficiary under a life insurance policy.

Final Thoughts

            ATROS are often overlooked—but they are legally binding and apply from day one of your case. Before making any major financial moves or family decisions, talk to a family law attorney. A simple mistake—like changing a beneficiary or moving money—can have lasting legal consequences during your divorce.

            DISCLAIMER: This article is not a substitute for professional legal advice.  This article does not create an attorney-client relationship, nor is it a solicitation to offer legal advice.

            Erica Shepard is an attorney at Porter Simon licensed in California and Nevada.  Ms. Shepard is a Certified Specialist in Estate Planning, Trust and Probate Law.  Ms. Shepard can be reached at shepard@portersimon.com or http://www.portersimon.com

            Traci S. Mason is an attorney at Porter Simon licensed in California. She is the lead attorney for the firm’s Family Law Division where she focuses on all aspects of family law. Ms. Mason can be reached at mason@portersimon.com or http://www.portersimon.com