• Alan Jacobs

Restrictions on Transferring Assets During a Divorce

Under Rule 411, parties to a Massachusetts divorce are prohibited from liquidating, transferring or otherwise disposing of marital assets while the case is pending, except for the purposes permitted under the rule. Specifically, Subsection 1 of Rule 411 provides:


Neither party shall sell, transfer, encumber, conceal, assign, remove or in any way dispose of any property, real or personal, belonging to or acquired by, either party, except: (a) as required for reasonable expenses of living; (b) in the ordinary and usual course of business; (c) in the ordinary and usual course of investing; (d) for payment of reasonable attorney’s fees and costs in connection with the action; (e) written agreement of both parties; or (f) by order of the court.


In addition to limiting how parties may treat marital assets, Rule 411 also prohibits parties from incurring debt in each others’ names or canceling any medical insurance, life insurance, car insurance or disability insurance policy.


At its most basic level, Rule 411 seeks to prevent the transfer or disposal (i.e. spending) of any marital assets once a divorce is filed, subject to common sense exceptions such as paying one’s legal expenses and covering reasonable living expenses. Although M.G.L. c. 208 s. 34 broadly defines marital property to include the “any part of the estate of” either party, in practice, Rule 411 is most applicable to jointly held assets, such as joint bank accounts.


Parties (and the mediators and attorneys advising them) must be cautious about how they treat assets once a complaint for divorce has been filed and served. It is not enough for a party to intend to spend the money in manner permitted under Rule 411. They must actually spend the the money in this way. Parties who transfer or withdraw marital funds under an exception to Rule 411 should make sure they actually use the funds for a permitted purpose. The mere fact that a parties intends to use the funds for an acceptable purpose at the time of the withdrawal is not a defense if, after the transfer, they fail to use the funds for their original purpose.

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