Selling assets before divorce is something that many who find themselves in this type of stressful situation may attempt to do. It is a rough time that the couple is going through. There is usually a mix of emotions. Selling your assets can make a bad situation worse. You most likely have concern about how the money you have, your house, and other assets to be divided.
Concerns about how fair the split may be tempting you to start selling assets prior to divorce. These types of actions are often spurred on by anger and frustration. You may believe that you are entitled to more than your spouse.
What you may not realize is that this can also get you into some serious legal trouble. Every state has its own specific laws as to how assets are to distribute in a divorce. Therefore, if you consider the sale of your assets, you need to look closely at what the rules are. In general, the rules fall into one of two categories.
Community Property States
Those states that are classed as community property states have laws in place that create a 50-50 split of the assets that were accumulated during the marriage. It doesn’t matter which of the parties may have actually purchased them. They are considered to be part of the marital assets.
There are situations where individuals enter into a marriage and bring some assets into the marriage with them. Likewise, this could be a specific amount of money such as savings, or perhaps a home or other type of asset. In this case, these types of assets will not be considered as part of the community property of the marriage. The exception to this is if you decided to co-mingle these assets in your relationship. In addition, it can get a little confusing when it comes to assets owned prior to the marriage.
For example, if you have $25,000 in a bank account in your name, when you entered into the marriage, and you kept it in your name, then that is your asset. However, if you took that money and put it into a joint account with your spouse, then you have co-mingled that asset. It is part of the marital assets. Or, you may have entered into the marriage with a new vehicle that you kept in your name. Likewise, this too may not be considered as part of the marital estate.
Equitable Distribution States
When selling your assets, you need to determine if the laws are based on equitable distribution. In this case, the splitting of the assets is based on fairness according to the specific circumstances of the marriage. While the law states each of the parties are entitled to a share, it doesn’t mean that each will get half. Many contributing factors are taken into account when the equitable distribution is being determined.
It takes into account what each of the party has contributed during the course of the marriage. It also takes into account how long the marriage was in place. Usually, the sale of assets before a divorce and the divide of assets means the laws of the state are not adhered to. Therefore, this can create legal consequence for the party attempting to sell assets before divorce. Selling assets before the divorce is final can be a crime, you may easily get caught.
Consequences
What some will attempt to do is hide their assets before actually selling them. This is so they will not be included in the marriage estate. During the divorce proceeding, there is what is called a 'Discovery'. This is where both spouses must provide all their information about their assets and financial information to each other. If you are hiding assets or have been active in selling assets before divorce, and you do not disclose this, you could be charged with perjury.
While the sale of assets before the divorce may be tempting, it's not advised. In addition, it will probably get you into some serious legal trouble.
You need to take the time to research the divorce laws of the state. Likewise, make sure that you rely on the proper resources to assist you with making the right decisions. There is a lot that has to be considered regarding the sale of the home. No doubt, you and your spouse want to get the most for it if you decide to sell. Therefore, if the value of the home is not going to cover the mortgage outstanding, then you may want to find alternatives to selling assets before divorce.
Sell Your House Fast
Selling a house quickly, in West Valley City, after a divorce can be a stressful situation. If you need to sell your house fast and don’t want to go to all the work, Enlight Homebuyers will give you a cash offer in 24 hours. Just give us a call at 801-939-0123!
