When Is a Receivership Used in California Divorce Proceedings?

When Is a Receivership Used in California Divorce Proceedings?

Have you ever wondered what can be done when one spouse threatens to hide or get rid of property during divorce or legal separation proceedings? California law gives judges the power to appoint what is called a “receiver.” A receiver’s job is to find, take control of, manage, and preserve assets.

Any party may ask for a receiver to be appointed. However, receivers serve as officers of the court and must be neutral where the parties are concerned, favoring neither.

There are several reasons that a court might appoint a receiver in a family law case:

  • hiding or moving assets;
  • diminishing assets;
  • depleting assets; or
  • threatening to do any of the above.

By law, a court may impose a receivership to tend to a couple’s assets for the following purposes:

  • carrying a judgment into effect;
  • disposing of property according to the terms of a judgment;
  • preserving assets until they are all identified and divided by a court;
  • preserving assets pending an appeal; and
  • preserving assets for use in setting child support.

At bottom, receiverships are intended to prevent a party from squandering community assets to the detriment of the other party or the couple’s children.

For example, one of the major California cases relating to receiverships in family law is Quaglino v. Quaglino, 88 Cal. App. 3d 543 (1979). In Quaglino, the husband killed the wife, leaving two minor children and landing him in jail. The children’s guardian ad litem bought a lawsuit against the husband, seeking child support. The trial court appointed a receiver, and the husband appealed.

The appellate court affirmed. It rejected the husband’s argument that receivership was improper because no judgment had yet been entered. In so doing, the court specifically held that the trial court had the power to appoint a receiver due to the “great probability that [it] would soon make an order of support and that the defendant’s property was in fact needed as a source to provide payment.

Receiverships are set up to protect the parties’ assets pending the outcome of legal proceedings. Although they can be costly, they are sometimes necessary to preserve the status quo and to protect the parties and their children. If you need an aggressive family lawyer who isn’t stymied by the more complicated aspects of family law, call me today. I have an extensive background both in family law and in business: (415) 259-6636.

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