The Financial Effects of Separation and Utah’s Automatic Domestic Injunction

The actual Date of Separation (“DOS”) is important and can affect things such as credit, pension benefits, alimony, and other marital assets. From this date on, you and your ex-spouse-to-be, are now in limbo both legally and financially, and will retain that status until the actual Date of Divorce. During this time period, there is potentially a large amount of money at stake, depending upon you and your spouse’s particular situation. You may still be held responsible for any debts incurred by your spouse after the DOS; the value of a retirement plan or other marital asset such as residential property can go up or down, often by thousands of dollars.

To help address the possibility of one spouse causing financial difficulties for the other spouse, and other concerns during separation, Utah has adopted what is referred to as the Automatic Domestic Injunction, which is as follows:

Rule 109, Injunction in certain domestic relations cases

(a) Actions in Which a Domestic Injunction Enters

Unless the court orders otherwise, in an action for divorce, annulment, temporary separation, custody, parent time, support, or paternity, the court will enter an injunction when the initial petition is filed. Only the injunction’s applicable provisions will govern the parties to the action.

(b) General Provisions

(1) If the action concerns the division of property, then neither party may transfer, encumber, conceal, or dispose of any property of either party without the written consent of the other party or an order of the court, except in the usual course of business or to provide for the necessities of life.

This means that in matters of divorce and other domestic matters such as alimony and child custody, once the petition is filed the parties to the case are not allowed to close accounts, encumber property, dispose of, or hide property. Property is anything owned by either of the parties, including land, houses, personal property such as bank accounts, cars, recreational equipment, a coin collection, clothes, and so on. Property in this rule includes all personal and real property.

There is more to this rule, which is discussed in section: Effect of Utah’s Automatic Domestic Relations Injunction on Behavior ­­­

 

What Happens to Finances between Separation and Divorce

• Monthly Mortgage & Credit Lines
  Generally speaking, you and your spouse will still be held responsible for any and all debts incurred during the marriage. In other words, the monthly mortgage statement will continue to arrive even after separation. However, to avoid future problems, it is not a bad idea to reach a written agreement to put a hold on adding to the balance on all joint credit lines, or at the very least, establish which party will take care of what obligation and formally write each creditor informing them of you and your spouse’s intentions with respect to the outstanding debt. In this way you will likely (but not always) protect yourself from any financial trouble your spouse may get themselves into after the DOS. This may also prove invaluable as you apply for credit in the future.
• Retirement Funds
  Most of the time, with respect to retirement benefits, the division of such an account will not come until the actual Date of Divorce. To fully understand and protect your interest in any particular pension fund, profit sharing program, or other type of benefit plan it is suggested that a copy of the benefit brochure issued by the company or actual retirement plan itself be obtained for scrutiny. One way in which to achieve this would be to contact the Human Resource Department at you or your spouse’s place of employment. It is also important to ensure you, or your spouse, obtain and provide the most recent statement from these accounts.
• Businesses and Investments
  If you are in a situation where there will ultimately be business or investment assets to be divided, again the DOS can have an impact. The value of a specific asset will likely be valued at the actual time of divorce, as compared to the date of separation. In other words, if a business value appreciates (gains in actual fiscal worth) greatly during the period of separation, both spouses will likely be awarded an equal share of that appreciation at the time of divorce. The same could be said for a stockholding that suddenly skyrockets in terms of value during the separation.
• Spousal Support or Alimony
  Finally, although, most people are not fully aware of it, the Date of Separation can affect the court’s final decision with respect to length of alimony payments. Alimony is in play for long-term marriages that are usually defined as those lasting more than five years from the actual Date of Marriage to the actual date of divorce, sometimes the date of separation is used.  The dominant rationale is that a non-working, dependent or a lower wage-earning spouse is entitled to alimony; which in Utah, is now calculated by equalizing the parties’ standard of living at the time of separation. In comparison to a situation where the couple’s marriage was not defined as long-term.  In Utah alimony is not awarded for more years than the length of the marriage. However, there are possible exceptions to this. Currently, the courts are generally awarding alimony for less time than the length of the marriage. If there are dependent children, alimony may be awarded for a number of years closer to the length of the marriage, but not always. Finally, spousal support payments made during the parties’ separation are usually credited towards the number of years alimony will be paid.