TIPS REGARDING CALIFORNIA "ATROS" IN DIVORCE
CA Family Code Section 2040
What Are The Automatic Restraining Orders In California Divorces and Legal Separations?
Family Code Section 2040 sets forth what legal professionals often refer to as the "ATROS" - automatic temporary restraining orders in the summons. At the moment that a spouse or domestic partner sign the Petition for Dissolution of Marriage or Domestic Partnership, Legal Separation, or Nullity of Marriage, they become bound by the contents of the Summons which must accompany the initial filing. The Summons sets for the language of Family Code section 2040 verbatim. Of course, few people actually read it. Most family law attorneys will explain its terms to their clients, because there are serious consequences that can accrue if a party violates them. Once the Summons is served upon the Respondent, they likewise become bound by the ATROS. Failures to comply with section 2040 can result in contempt citations or allegations for breach of fiduciary duty.
At the same time, it contains important exceptions (which are often abused). Chief among them is the right to arguably raid the community property assets or bank account in order to hire a party's attorney, as set forth in subsection (a)(2). The legislative intent is to encourage parties to be able to retain competent legal counsel for their divorce or legal separation, but fees are limited to what is reasonable and a spouse who does so is required to account to the other for how these monies was spent. Unfortunately, this provision is easily and often abused. Parties can "park" money with their lawyers (although this would obviously be an ethical violation) but more commonly one spouse may claim that they sold property or removed funds from a bank account to pay an attorney. Because most family court judges are reluctant to second guess attorneys on what is "reasonable", such transactions are rarely reviewed.
Another provision of section 2040 that is difficult to enforce and so gets abused is the first paragraph of subs. (a)(2) which permits parties to dispose of assets "in the usual course of business or for the necessities of life." What does that really mean, and how do you measure it. In my experience, if the other spouse claims that this is how they used the money imposing accountability is problematic except in the most extreme cases (i.e., emptying the bank account to take a trip to Las Vegas as an expression of grief of the marital break-up won't pass muster). I can probably the times on my hands that an opposing party or their lawyer gave the notice as is required for "extraordinary expenditures."
Since government can't and shouldn't micro-manage the daily lives of people in divorce, there is an element of voluntary compliance with the ATROS. We hope that spouses and domestic partners will behave honorably, but many don't. My recommendation is that you read this section carefully and give the required notices to insulate any claims that you breached your statutory duties! If the other side fails to abide by the ATROS your remedy is private enforcement - which can be costly.
Finally, there are important consequences to the disposition of jointly titled, right of survivorship interests in real estate or personal property that are important to recognize: If property is held in joint tenancy and one party dies before marital status has terminated (i.e., the parties become "unmarried"), the other probably estranged spouse inherits it all!
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CALIFORNIA FAMILY CODE
Orders in Summons
Family Code Section 2040
(a) In addition to the contents required by Section 412.20 of the Code of Civil Procedure, the summons shall contain a temporary restraining order:
(1) Restraining both parties from removing the minor child or children of the parties, if any, from the state, or from applying for a new or replacement passport for the minor child or children, without the prior written consent of the other party or an order of the court.
(2) Restraining both parties from transferring, encumbering, hypothecating, concealing, or in any way disposing of any property, real or personal, whether community, quasi-community, or separate, without the written consent of the other party or an order of the court, except in the usual course of business or for the necessities of life, and requiring each party to notify the other party of any proposed extraordinary expenditures at least five business days before incurring those expenditures and to account to the court for all extraordinary expenditures made after service of the summons on that party.
Notwithstanding the foregoing, nothing in the restraining order shall preclude a party from using community property, quasi-community property, or the party's own separate property to pay reasonable attorney's fees and costs in order to retain legal counsel in the proceeding. A party who uses community property or quasi-community property to pay his or her attorney's retainer for fees and costs under this provision shall account to the community for the use of the property. A party who uses other property that is subsequently determined to be the separate property of the other party to pay his or her attorney's retainer for fees and costs under this provision shall account to the other party for the use of the property.
(3) Restraining both parties from cashing, borrowing against, canceling, transferring, disposing of, or changing the beneficiaries of any insurance or other coverage, including life, health, automobile, and disability, held for the benefit of the parties and their child or children for whom support may be ordered.
(4) Restraining both parties from creating a nonprobate transfer or modifying a nonprobate transfer in a manner that affects the disposition of property subject to the transfer, without the written consent of the other party or an order of the court.
(b) Nothing in this section restrains any of the following:
(1) Creation, modification, or revocation of a will.
(2) Revocation of a nonprobate transfer, including a revocable trust, pursuant to the instrument, provided that notice of the change is filed and served on the other party before the change takes effect. (3) Elimination of a right of survivorship to property, provided that notice of the change is filed and served on the other party before the change takes effect.
(4) Creation of an unfunded revocable or irrevocable trust.
(5) Execution and filing of a disclaimer pursuant to Part 8 (commencing with Section 260) of Division 2 of the Probate Code.
(c) In all actions filed on and after January 1, 1995, the summons shall contain the following notice:
"WARNING: California law provides that, for purposes of division of property upon dissolution of marriage or legal separation, property acquired by the parties during marriage in joint form is presumed to be community property. If either party to this action should die before the jointly held community property is divided, the language of how title is held in the deed (i.e., joint tenancy, tenants in common, or community property) will be controlling and not the community property presumption. You should consult your attorney if you want the community property presumption to be written into the recorded title to the property." (d) For the purposes of this section:
(d) For the purposes of this section:
(1) "Nonprobate transfer" means an instrument, other than a will, that makes a transfer of property on death, including a revocable trust, pay on death account in a financial institution, Totten trust, transfer on death registration of personal property, or other instrument of a type described in Section 5000 of the Probate Code.
(2) "Nonprobate transfer" does not include a provision for the transfer of property on death in an insurance policy or other coverage held for the benefit of the parties and their child or children for whom support may be ordered, to the extent that the provision is subject to paragraph (3) of subdivision (a).
(e) The restraining order included in the summons shall include descriptions of the notices required by paragraphs (2) and (3) of subdivision (b).