How Do You Freeze Assets During a Divorce?

Lawyers freeze assets during a divorce by filing a motion in court or obtaining an automatic temporary restraining order, or ATRO, according to Forbes magazine. In some states, ATROs are mutual orders that prevent spouses from selling property, changing insurance policies, switching bank accounts and hiding financial assets.

States handle these restraining orders differently. California and New York have ATROs, but some states do not. Attorneys must petition the court for financial restraining orders in states without an automatic provision. A spouse must prove that the opposing party violated the restraining order before a contempt petition is filed, states Forbes. Each party must continue to monitor assets throughout divorce proceedings.

An ATRO signed by a judge keeps either party from altering the financial status quo in the marriage before the divorce is finalized. These documents provide lawyers and accountants ways to examine the marital assets as the divorce proceeds in court, notes Forbes. These temporary restraining orders sometimes appear as supplementary documents to the initial dissolution of marriage petition filed in court.

Restraining orders pertaining to finances normally stipulate that spouses are only permitted to use assets for necessities and day-to-day living expenses in the usual course of business. Spouses are sometimes able to pay for such things as caregiver expenses for an elderly relative, but not things such as a $100-gift for an adult child. Courts have wide latitude with regard to what type of expenses are monitored, according to Forbes.