Restraining Provision

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Restraining Provisions during a divorce.

  2. Two main statutes
    1. Minn. Stat.58 Subd. 1(a)
      1. Transfer, encumbrance, concealment, or disposition of marital assets.
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During the pendency of a marriage dissolution, separation, or annulment proceeding, or in contemplation of commencing a marriage dissolution, separation, or annulment proceeding, each party owes a fiduciary duty to the other for any profit or loss derived by the party, without the consent of the other, from a transaction or from any use by the party of the marital assets. If the court finds that a party to a marriage, without consent of the other party, has in contemplation of commencing, or during the pendency of, the current dissolution, separation, or annulment proceeding, transferred, encumbered, concealed, or disposed of marital assets except in the usual course of business or for the necessities of life, the court shall compensate the other party by placing both parties in the same position that they would have been in had the transfer, encumbrance, concealment, or disposal not occurred. The burden of proof under this subdivision is on the party claiming that the other party transferred, encumbered, concealed, or disposed of marital assets in contemplation of commencing or during the pendency of the current dissolution, separation, or annulment proceeding, without consent of the claiming party, and that the transfer, encumbrance, concealment, or disposal was not in the usual course of business or for the necessities of life. 

In compensating a party under this section, the court, in dividing the marital property, may impute the entire value of an asset and a fair return on the asset to the party who transferred, encumbered, concealed, or disposed of it. Use of a power of attorney, or the absence of a restraining order against the transfer, encumbrance, concealment, or disposal of marital property is not available as a defense under this subdivision.

  • Minn. Stat. 518.091

    NOTICE OF TEMPORARY RESTRAINING AND ALTERNATIVE DISPUTE

RESOLUTION PROVISIONS

UNDER MINNESOTA LAW, SERVICE OF THIS SUMMONS MAKES THE FOLLOWING REQUIREMENTS APPLY TO BOTH PARTIES TO THIS ACTION, UNLESS THEY ARE MODIFIED BY THE COURT OR THE PROCEEDING IS DISMISSED:

(1) NEITHER PARTY MAY DISPOSE OF ANY ASSETS EXCEPT (i) FOR THE NECESSITIES OF LIFE OR FOR THE NECESSARY GENERATION OF INCOME OR PRESERVATION OF ASSETS, (ii) BY AN AGREEMENT IN WRITING, OR (iii) FOR RETAINING COUNSEL TO CARRY ON OR TO CONTEST THIS PROCEEDING;

(2) NEITHER PARTY MAY HARASS THE OTHER PARTY; AND

(3) ALL CURRENTLY AVAILABLE INSURANCE COVERAGE MUST BE MAINTAINED AND CONTINUED WITHOUT CHANGE IN COVERAGE OR BENEFICIARY DESIGNATION.

IF YOU VIOLATE ANY OF THESE PROVISIONS, YOU WILL BE SUBJECT TO SANCTIONS BY THE COURT….

Questions and discussions:

  1. What are defined as “necessary” expenses?
  2. What about taking tools or other property from a house pending the divorce? Is this a violation?
  3. How about trading a car in for a new one?
  4. Does “Insurance” mean ALL insurance or just health insurance?
  5. Can you change the mode of payment of insurance?
  6. Is a party required to keep paying credit card payment since the good credit score is an Asset?
  7. What happens if the husband changes his life insurance policy AFTER the divorce starts and changes the beneficiary from his wife to his sister?
  8. What types of sanctions can the court impose?
  9. If the money IS taken and used for necessities of life…is it still considered marital property and attributed to the person who used it? or in other words should it go on the Debt Asset sheet?

Answers:

  1. March v. March, 435 N.W.2d 569 (Minn. Ct. App. 1989) (use of money during separation to pay for necessary living expenses, uninsured medical expenses, and spousal maintenance was not dissipation of assets);             
  2. Taking property from the house was viewed as a violation…one year later and AFTER the 2700 worth of property was returned…the award of sactions of 13K was reduced.  The proper use of wards is the conduct based fee award under 518.14. it noted that  changes of access codes, locks, etc etc could be supporting a request for conduct based fees.  Jahnke v. Jahnke COA 2003
  • Does trading in a car for a new car count as a violation?  Yes. “flagrant disregard of the obligation imposed by 518.59) NOTE: this is a Anoka county case…not COA>
  • Insurance: means all insurance
  • Beneficiary and coverage appear to be the only prohibitions.
  • Credit card payments are not required under 518.091 – Jacobson v. Jacobson, 2015 Minn. App. Unpub. LEXIS 222 preservation of credit rating does not constitute an asset if the issue done as a way to harass that could be a problem…
  • The statute does not apply when marital property is disposed of prior to or during a dissolution proceeding, but redounds to the marital estate before the division of the estate, because the statute was not meant to provide a financial windfall to the innocent party. Sirek v Sirek 693 N.W.2d 896 COA  2005) 
  1. Changes to beneficiary made in violation of 518.091 are NOT void as a matter of law and the issue of what to do will be viewed as a matter of equity.  American Fmaily Life Inc. v. Noruk 518.N.W.2d 921 (coa 1995)
    1. Married 1996…2007 $1m policy for wife…then  in April 2012 filed for divorce….may changed beneficiary to his sister…June ate a shotgun.
      1. Does 518.091 control? Why or why not?
      1. Held it was not a marital asset as it did not exist…so whle he violated the provision of 518.091..when he died so did the divorce action and thus no enforcmenet mechanism under 518.58 as it requires a “current dissolution, separation, or annulment proceeding”
  • A few from case law
    • Holder v. Holder, 403 N.W.2d 269 (Minn. Ct. App. 1987) (depletion of savings account was to be charged against husband’s share of marital estate)
    • Carrick v. Carrick, 560 N.W.2d 407 (Minn. Ct. App. 1997) (wife dissipated marital assets by spending marital funds on gambling during pendency of dissolution proceedings)
    • Under Chrysler v Hecker – Contempt  30 days to purge by putting ghte money back into the account/trust account.
    • Conduct Based fees
    • It goes against in the column.
  • Note: it appears that assets used to pay for the necessities of life are not necessarily forced to be credited toward the persuasion it Kopecky v. Kopecky 1995 COA
    • NOTE: atty fees…are viewed differently under Thomas v Thomas 407 N.W.2d 124, (coa 1987) note overspending..no luck.
    • Maybe separate account..?