Enforcement of Property Rights
You’ve just spent a lot of time, money, and energy traveling through your divorce and now you have a Final Decree. Your divorce decree has purportedly divided your community estate in a “just and right” manner. The property division might have been resolved through an informal settlement agreement, mediation, or a contested trial. Unfortunately, your former spouse may not follow the terms of the decree no matter how it was resolved.
In that case, how do you protect and enforce your property rights pursuant to your decree?
The specific procedures for filing a motion to enforce a property term in your decree are set forth in detail in another article on our website, Enforcement.
The enforcement starts long before the divorce is even over. It starts by anticipating that you might have to enforce the terms of your decree and carefully drafting that decree to be as specific as possible. By doing this, your path to enforcement may be more assured, less expensive, and perhaps even less hostile.
The goal is to make the terms of your decree clearly understood by both you and your spouse.
As you’re considering the completion of your divorce, think about talking with your attorney about mandatory mediation and/or binding arbitration clauses. Penalties can be stipulated for the party who loses the enforcement action, such as an award of reasonable attorney’s fees, costs, and expenses related to the post-divorce proceeding.
Every case is important and unique. There are a myriad of types of property that may need to be characterized, traced, valued and then divided in your divorce: real estate, personal residences, rental property, investments, business entities, stock, bonds, futures, pensions, retirement plans, 401(k)s, IRAs, SEPs, cash, bank accounts, brokerage accounts, antiques, personal belongings, inherited property, mineral rights, livestock, pets, and many others. Once characterized, traced, and valued, the assets are easily transferable. For the majority of your property, enforcing your property rights under the decree should be simple if the decree was carefully drafted.
Specific language should be drafted concerning the delivery of personal property, vehicles and other property items. When bank accounts, financial accounts, investment accounts, and brokerage accounts are awarded to you or your spouse, held in one name or in both names, your decree should order the removal of the other party’s name from the account or transfer the account into the name of the party receiving it. There should be a certain date placed into the decree, so there are no ambiguities.
In some instances, Qualified Domestic Relations Orders (QDRO) and Domestic Relations Orders (DRO) should be drafted, signed, and then presented to the court for its approval and signature. In general, QDROs and DROs are needed to effectuate a nontaxable transfer between you and your spouse related to certain retirement, 401(k) plans, IRAs, SEP, government benefit plans and other accounts. These documents will protect and help you to enforce your property rights and should often include terms regarding who shall draft the necessary documents, when they shall be presented for review, and when they shall be presented to the judge for his or her signature and approval. If those documents are presented after 30 days from the date your decree was signed by the judge, the court does not have the power to sign the order, and you might have to incur the costs of filing a separate lawsuit to get the orders (QDRO or DRO) signed by the court.
It might also be necessary to protect your rights in real estate. This can be accomplished in various ways whether you want to keep the property or simply want the property sold and then the funds disbursed. If you want to sell the property, you should consider the following questions so the appropriate language can be inserted into your decree.
- Who will be the listing agent?
- How long will the selected real estate remain with that agent?
- What will be the listing price and will adjustments to the price be made? If so, under what conditions?
- Who pays for the property taxes, insurance, mortgage, and bills while the sale is pending?
- Who maintains the property in “viewing” condition?
- Who accepts or rejects bona fide offers to purchase?
- What liens, notes, and expenses get paid upon its sale?
- What happens to the remaining proceeds from the sale?
- Should a receiver be appointed to take control of the sale and, if so, under what conditions?
You might also consider whether you or your spouse (whomever is awarded community real estate) has the ability to refinance the mortgage to remove the other party from the note. If that party does not have the ability to refinance, you will likely need protection from a possible default by that party. Language can be inserted that requires the receiving party to sign an Owelty Lien, a Deed of Trust and Assumption of the Mortgage, or another document (i.e., the right to re-enter the property and take possession of it, the appointment of a receiver to sell the property, or an agreement of the parties to sell the property if the residence cannot be refinanced within a specific period of time) to protect the credit and any remaining property interest the non-receiving spouse may have. The easiest way to enforce and protect your property rights in the division of a community residence, when there is a question as to the ability to refinance the property and/or the ability to pay the expenses related to the property, is to simply sell the residence before the divorce becomes final and divide the proceeds as agreed or ordered.
The lawyers at Orsinger, Nelson, Downing & Anderson can help you draft an enforceable Final Decree of Divorce to give you the best chance of avoiding expensive post-divorce proceedings, and if necessary, to prosecute your enforcement action or defense of an action against you.