- There are serious consequences to violating an ATRO. An ATRO is a legal document designed to protect both spouses from changes made to their financial situation without their consent, or their knowledge. If either party violates the terms of the ATRO, serious legal consequences, including financial restitution and significant fines, can follow. If, for example, you discover that during the divorce process your husband sold a family vacation home without consulting you, you could be entitled to restitution in the amount of half the value of the property sold, not just half of its sale price.
Of course, that means if you’re in doubt as to whether a planned bank account withdrawal or other financial action constitutes a violation of your ATRO, you need to take care to do the right thing. Make sure you have a qualified divorce team in your corner to help you navigate your ATRO’s temporary restrictions while your settlement is negotiated.
· An ATRO can be altered. If both spouses agree to it, the Courts can issue a modification of the terms of the ATRO as your divorce action proceeds.
· Some expenses are not subject to an ATRO. Although ATROS prohibit many expenditures in order to “freeze” your current financial picture while your divorce is underway, you are still allowed to spend money in your “usual course of business.” However, the Courts get to decide what “usual” and “business” mean in the context of your marriage and what expenses fall in this category. The Courts have been known to exercise considerable discretion in this area.
You are also allowed to use your assets to retain legal counsel. In general, paying your attorneys’ fees is not considered a violation of your ATRO.
As always, it’s a good idea to check with your divorce attorney regarding the details of your particular case.
· ATRO requirements vary from state to state. As mentioned above, not all states require an ATRO as part of a divorce filing. New Jersey and South Carolina, for example, do not, while California and Minnesota make an ATRO part of every divorce petition. Further complicating things, states that do require ATROs don’t all implement them the same way. ATROs are a relatively recent development in New York State, where the Notice of Automatic Orders, which prohibits either spouse from hiding or liquidating assets once a divorce action has begun, was added to Domestic Relations Law in 2009.
It’s important to note that having an ATRO as part of the divorce filing is particularly helpful when marital assets have been largely under control of one spouse. The ATRO is generally thought to be a benefit to the less-monied spouse (who is typically, but not always, the wife). An ATRO provides an immediate level of protection against, say, your husband selling the family sailboat to a friend for an artificially low price to keep it out of the divorce settlement, then buying it back again after the divorce is final. Without an ATRO in place, it would fall to the aggrieved spouse to spend time and money to obtain an injunction from the Courts against such a sale.
Even under less contentious circumstances, an ATRO is tremendously valuable for the level of comfort it provides, allowing you to rest assured, knowing that your financial status quo will remain in tact while your divorce settlement is thoughtfully and properly negotiated. As I’ve seen countless times, that can mean some welcome peace-of-mind at a time when it otherwise seems in short supply.