North Carolina HB 866: Automatic Order/Equitable Distribution Claim.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
H 2
HOUSE BILL 866
Committee Substitute Favorable 4/29/25

Short Title: Automatic Ord/Equitable Distribution Claim. (Public)
Sponsors:
Referred to:
April 10, 2025
*H866-v-2*
A BILL TO BE ENTITLED 1
AN ACT TO REQUIRE AUTOMATIC ENTRY OF AN ORDER PROHIBITING SPOUSES 2
FROM WASTING, CONVERTING, OR SECRETING ASSETS UPON FILING A CLAIM 3
FOR EQUITABLE DISTRIBUTION. 4
The General Assembly of North Carolina enacts: 5
SECTION 1.1. Article 1 of Chapter 50 of the General Statutes is amended by adding 6
a new section to read: 7
"§ 50-23. Automatic order for equitable distribution claims. 8
(a) As used in this Article, "automatic order" is the standing order entered by the court to 9
prevent the waste, dissipation, or secreting of assets or increasing debt or other liabilities and 10
which is entered at the time an equitable distribution claim is filed in an action. The court must 11
enter the form order created by the Administrative Office of the Courts for the automatic order. 12
(b) The automatic order must contain the following provisions: 13
(1) Neither party shall sell, transfer, encumber, conceal, assign, remove, 14
withdraw, or in any way dispose of, without the consent of the other party in 15
writing, or by order of the court, any property, including real estate, personal 16
property, cash, accounts, stocks, mutual funds, bank accounts, loyalty points 17
or miles, cars, and boats whether individually or jointly titled, except in the 18
usual course of business, for customary and usual household expenses, or for 19
reasonable attorneys' fees in connection with any claim filed under this 20
Chapter. 21
(2) Neither party shall sell, transfer, encumber, assign, remove, withdraw, or in 22
any way dispose of any tax-deferred funds, stocks, or other assets held in any 23
individual retirement accounts, 401K accounts, profit sharing plans, Keogh 24
accounts, or any other pension or retirement account, and the parties shall 25
further refrain from applying for or requesting the payment of retirement 26
benefits or annuity payments of any kind, without the consent of the other 27
party in writing, or upon further order of the court; except that any party who 28
is already in pay status may continue to receive such payments thereunder. 29
(3) Neither party shall sell, transfer, encumber, assign, remove, withdraw, or in 30
any way dispose of any property owned by or for the benefit of the children, 31
including any 529 plan accounts, real estate, personal property, cash, accounts, 32
stocks, mutual funds, bank accounts, loyalty points or miles, and cars whether 33
individually or jointly titled, except for customary and usual expenses 34
historically paid for the benefit of the children from those assets without the 35
consent of the other party in writing or by order of the court. 36

General Assembly Of North Carolina Session 2025
Page 2 House Bill 866-Second Edition
(4) Neither party shall incur unreasonable debts hereafter, including further 1
borrowing against any credit line secured by the family residence, further 2
encumbering any assets, or unreasonably using credit cards or cash advances 3
against credit cards, except in the usual course of business or for customary 4
and usual household expenses, or for reasonable attorneys' fees in connection 5
with any claim filed under this Chapter. 6
(5) Neither party shall remove the other party as beneficiary, co-owner, cosigner, 7
or authorized user of any account in subdivisions (1) through (4) of this 8
subsection nor shall they add a nonparty to any account as a beneficiary, 9
co-owner, cosigner, or authorized user of any account in subdivisions (1) 10
through (4) of this subsection without the consent of the other party in writing, 11
or by order of the court. 12
(6) Neither party shall cause the other party or the children to be removed from 13
any existing medical, hospital, and dental insurance coverage, without the 14
consent of the other party in writing, or by order of the court. Each party shall 15
maintain the existing medical, hospital, and dental insurance coverage in full 16
force and effect until the parties agree in writing or the court orders otherwise. 17
(7) Neither party shall change the beneficiaries of any existing life insurance 18
policy without the consent of the other party in writing, or by order of the 19
court. Each party shall maintain the existing life insurance, automobile 20
insurance, homeowner's insurance, and renter's insurance in full force and 21
effect until the parties agree in writing or the court orders otherwise. 22
(8) This order is entered without prejudice to either party. 23
(c) The plaintiff shall serve the automatic order with the summons and complaint when 24
there is a newly filed equitable distribution claim as required by Rule 4 of the North Carolina 25
Rules of Civil Procedure. If the equitable distribution claim is filed in an existing action, the 26
automatic order sh