Fidelity Litigation – Why Using a PDA is Not a Good Idea
Fidelity lawsuit is a common tool used by child custody and visitation lawyers to help their client to obtain the full custody of the child or children. In this scenario, the lawyer requests the courts to allow his client to utilize his 401K funds in order to pay for his own ex-spouse’s expenses, or even help pay for the children. This is obviously only applicable if the child has been living with both parents since the filing of the divorce case in the first place. The judge will then review the Mutual Funds Clause of the prenuptial agreement and will grant the motion if the court believes that it is in the best interest of the children.
This might sound bizarre but if one parent washes the dirty laundry before the judge then they can be exempted from paying for the other’s expenses. How is this possible? Well, the Mutual Fund clause contains an exception when one of the parents files a PDA, or Private Dated Documents, with the courts, and then the court orders that the document be delivered to a particular record keeper secretly. If the court believes that this is proper then the court will grant the motion and permit the parent company to send a check for the other spouse’s expenses to that record keeper secretly.
Once the check is received by the record keeper of the funds are then distributed by the court according to the instructions in the clause. If the opposing party files a motion to dismiss stating that the other parent abused the funds then this entire scenario will not apply. The problem arises when one of the parents seeks to have an order of protection or bankruptcy prevented because they received a PDA from the other parent. Then, it will become a fraud case, and the fraudster will then be pursued with the fraud charges even though they cannot be proved. This is why it is so important to keep your records secret.
There are many ways to defeat a lawsuit such as trying to set aside an earlier order granting child support or alimony. A judge will set aside an earlier order if the situation justifies the judge to do so. But, if the PDA was used for secret payments to the opposing party then it is very possible that the order will be set aside. If this happens the opposing party may then try to have the other lawsuit delayed or stopped. Therefore, it is vitally important that you avoid putting out any money to pay the other party in advance of the filing of the lawsuit.
If you use a PDA to payoff the mutual funds then you are not putting money out there to fight a lawsuit. The reality is that a PDA is really nothing more than a credit card and as stated above, can easily be misused. Therefore, it is extremely important to avoid using PDA funds to pay off the opposition in a civil case, whether it is a trial or arbitration. The truth is that most of the fraudulent claims that are brought against other couples who have been paying child support on time are brought due to the misuse of their 401(k) s. Therefore, it is vitally important that you avoid putting any money out in front of your 401(k) any way shape or form.
Another reason that using a PDA is a bad idea is because you cannot show how the other person actually spent the money. You cannot show proof of who committed adultery or what they did with the money once they got it. So if you are seeking any proof of this type of fraud you are going to need to use a DNA test to prove who committed the fraud. In addition, you can easily obtain records from the IRS and other government agencies that show proof of fraudulent charges against the opposing party. If you find that a PDA was used in the fraud then you must fight back with a fraud investigator. Please consider all these factors before using a PDA to fight a fidelity lawsuit.