Question: I am going through a divorce and all of my business assets have been frozen. This has been going on for over 3 months now. I am going completely broke as I have been told I cannot operate any of my business.
Is this legal? Is there a way around this so I can at least make money to support my children whom I have full custody over?
If by “freeze” you mean the judge has restrained your assets, then, yes, judges do have authority to freeze assets. In most states, the judge’s power to do so is discretionary. This is not to say, however, that judges hand out restraining orders as a matter of course. State statutes specify what the party requesting the order must plead and the judge must find before issuing them. In Michigan, where I practice, for example, judges only issue ex parte restraining orders if irreparable injury, loss or damage will result to the marital estate if the judge does not restrain assets. Typically what we look for is an excessive spending habit (e.g., a wife who charged thousands of dollars to a joint credit card right before filing for divorce), one spouse maintaining control over the assets (e.g., a husband who owns and operates the family business), threats to “take each other down” financially, and so forth. Merely having access to marital money is insufficient, usually.
Why would a judge restrain assets? To preserve them until they are ready to be divided in the divorce decree. The order serves as keeper of the status quo or a “Big Brother” watching over each party’s moves and compelling each party to preserve the marital estate. Parties can also stipulate to a restraining order to get the same effect.
Restraining orders do not have to be all-encompassing, however. If the order is overly broad (e.g., it restrains a third party’s property or your separate property) or if you cannot make a living because your assets are restrained, you should ask the judge to revise it. For example, you might ask the judge to allow you to operate your businesses so long as you submit biweekly accountings showing each business’s income and expenses. Those would should precisely what money comes in and what goes out and where. Be advised that these records may become a part of the court file, and therefore public record. Be advised, too, that you must be truthful in your dealings with the judge, lest you be held in contempt. There are usually time limits within which to request a revised order. You should contact a lawyer or a legal aid clinic in your area to find out how long you have and, if you still have time, what paperwork to submit to the judge.
Keep in mind that I am a Michigan attorney and cannot give you detailed advice about the laws in Minnesota. You should not rely on this answer as establishing an attorney-client relationship, and you should contact an attorney in your area immediately if you need additional information or legal representation, as most parties in divorce cases do.
Jennifer M. Paine is an Associate Attorney in the Detroit, Michigan office of Cordell & Cordell P.C. She is licensed to practice in Michigan, and has been admitted pro hac vice in Illinois, Ohio, and the United States Court of Federal Claims. Ms. Paine received her BA in English and Mathematics from Albion College and graduated Summa Cum Laude. She received her Juris Doctorate from MSU College of Law and graduated Summa Cum Laude.