The family law summons contains automatic restraining orders that are binding on both the petitioner and the respondent. Automatic restraining order number 3 prohibits disposing of any property except under certain circumstances. That restraining order prohibits both parties from doing the following:
- 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
This order is intended to be as broad as possible.
It prohibits “encumbering” property. “Encumbering” means granting any property right that is not an ownership interest, such as a lien or mortgage. (See Black’s Law Dictionary (11th ed. 2019)) So, for example, making property, real or personal, security for a loan by a deed of trust, mortgage, or security agreement is prohibited.
The order prohibits “hypothecating” property. “Hypothecating” means the pledging of something as security without delivery of title or possession. (Black’s Law Dictionary (11th ed. 2019)) This is a more specific form of encumbrance.
The order prohibits “concealing” property. The language is plain and clear. This restriction is consistent with both parties’ fiduciary duties to fully disclose all assets to each other during the divorce proceeding so there may be an equal division of the assets. This provision also makes enforcing the court’s orders regarding property easier.
Finally, the order prohibits “disposing of any property.” “Disposing of” means getting rid of or transferring to the control of another. (Merriam-Webster Dictionary, www.merriam-webster.com) Thus, in the absence of an exception, the parties may not give assets away or transfer control of assets to someone else during the proceeding for the dissolution of the marriage.
What property does the automatic restraining order cover? The answer is “any property.” To make the order really clear, it specifically covers “real or personal” property. Property also is covered “whether community, quasi-community, or separate.”
“Real property” is “[l]and and anything growing on, attached to, or erected on it, excluding anything that may be severed without injury to the land.” (PROPERTY, Black’s Law Dictionary (11th ed. 2019))
“Personal property” is “[a]ny movable or intangible thing that is subject to ownership and not classified as real property.” (PROPERTY, Black’s Law Dictionary (11th ed. 2019))
Thus, real and personal property cover all property. So, all forms of property are subject to the automatic restraining order.
It also does not matter whether the property is “community, quasi-community, or separate” property. Thus, a party’s bank account containing only funds traceable to an inheritance (separate property) is subject to the order, as is property in another state that would have been community property if acquired in California (quasi-community property). Another example would be a house inherited by one of the parties (separate property). That house is subject to the restraining order.
The next blog will discuss the exceptions to the restraining order and how to implement them.
If you have any questions regarding the disposal of community property, please call the Wilson Law Firm at 916-608-8891 or visit us at https://wilsonlawfirmca.com/