Property division is one of the most important issues in most Minnesota divorces. A spouse who gets a bad deal in the property settlement can experience the financial consequences for years to come. When one spouse tries to defraud the court and the other spouse by hiding assets or depleting bank accounts, it can create serious problems for the other spouse. If the fraud is discovered, the guilty spouse will face severe consequences.
In Minnesota, the summons that is served with the divorce petition contains an automatic temporary restraining order which prohibits either spouse from disposing of any assets, except to pay for necessities like food and shelter, or for the purpose of generating income or preserving assets. A spouse can also spend funds if authorized by an agreement in writing with the other spouse, or for purposes of hiring a divorce lawyer.
The restraining order applies to both spouses until it is modified by the court in a subsequent order, including the final decree. It will no longer apply if the divorce proceeding is dismissed or more than a year goes by with no court filings in the case.
If a spouse violates the restraining order, they can be sanctioned by the court. The court has broad discretion in awarding sanctions. It can impose a monetary fine and require the offending spouse to repay the funds that were taken. It can also award additional assets to the defrauded spouse to make up for assets that were hidden or dissipated.
Detecting fraud in divorce proceedings can be difficult. An attorney with experience in family law matters can often alert a client to the telltale signs of asset depletion.
Source: The Office of the Revisor of Statutes, “2015 Minnesota Statutes,” accessed Nov. 21, 2015