People don’t always act appropriately or even legally when they’re going through a divorce. Some spouses will do anything to hold on to an asset. Others will do whatever they can to keep their spouse from getting it – even if it means depleting it or letting it be ruined.
If you’re facing that scenario – or you’re afraid that you might – you may want to talk with your family law attorney about setting up a receivership. This would involve asking the court to appoint a receiver to protect, or in some cases, to sell one or more marital assets.
Sometimes, a judge will independently order that assets be placed in a receivership based on what they see happening.
What types of assets typically go into receiverships?
Receiverships often come into play when a divorcing couple has a business or perhaps investment property. Perhaps you’re concerned that your spouse, who has been in charge of managing your business, has been neglecting it in the tumult of the divorce. It’s losing value as a result.
Maybe you fear that your spouse is not paying the mortgage on an investment property, which could put it into foreclosure. On the other hand, you might be concerned that your spouse is hiding income or profits earned on a joint asset.
What does a receiver do?
The role of the receiver will depend on the situation and on what the judge instructs them to do. They may be charged with managing the asset or with putting it up for sale so that the spouses can split the profits.
A receiver is typically a disinterested third party with the expertise needed for the job. The receiver always reports to the court -– not to either spouse.
A receivership in a divorce is a drastic step and not a common one. That’s because it involves taking control of people’s property. However, if you believe that one is necessary or if a judge has ordered one in your divorce, make sure you understand as much about the process as possible. Your attorney can provide valuable guidance.