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Can My Spouse Sell Assets During Our Divorce?

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As part of your divorce, if you and your spouse can’t agree on how to split property, a judge will decide for you. To ensure that things are equitable, the judge must have all information concerning your and your spouse’s belongings. Unfortunately, your spouse might not want a fair and just division of property. Perhaps they want to get more or simply want to prevent you from accessing some items. Therefore, they decide to sell certain pieces.

But can they do that?

No. Your spouse is prohibited from selling assets during divorce proceedings. They may be penalized for concealing or otherwise withholding property from or creating financial burdens upon you.

Facilitating a fair divorce process can be difficult without the help of a skilled family law attorney. If you need assistance in San Diego, call Claery & Hammond, LLP at (310) 817-6904 or contact us online today.

Separating Assets and Why Selling Them Is a Problem?

In California, any property acquired during a marriage is equally divided upon a divorce. One of the first steps in divorce proceedings is exchanging financial information with your spouse. The financial disclosure requires you to share what community and separate property you have. It allows a judge to consider everything and decide how to equally split your assets in a fair and just way.

Your spouse selling any community or separate property can negatively affect you in the long run. The judge might not know that the item (or items) was sold, preventing them from ensuring that you get your rightful portion. Meanwhile, your spouse pockets the proceeds from the sale, likely ending up in a better financial position than you.

Should My Spouse Know That They Can’t Sell Property During Our Divorce?

Part of the divorce packet you served upon your spouse after filing your petition is a Summons. The second page of the Summons lists out the restraining orders applying to you and your spouse. Your spouse should be very aware that they are prohibited from selling any property while your divorce proceedings are ongoing.

The restraining orders specifically state that property cannot be:

  • Transferred,
  • Encumbered,
  • Hypothecated,
  • Concealed, or
  • Otherwise disposed of.

The prohibition applies to both community (assets acquired during your marriage) and separate (assets acquired before your marriage) property.

This includes a range of items, such as:

  • Homes
  • Bank accounts
  • Retirement accounts
  • Investment accounts
  • Furniture,
  • Cars,
  • Jewelry, and
  • Anything else you and your spouse own.

Completely forbidding the sale or use of property during a divorce would be unreasonable. After all, you might need funds to take care of certain expenses, and being prevented from selling items could make things difficult.

Some exceptions exist concerning when you or your spouse may be able to use your property:

  • When it’s necessary to cover living expenses
  • When both spouses agree to the sale or use
  • When the court approves the sale
  • When the sale or use of the property is a part of ordinary courses of business
  • When needed to pay for attorney fees or court costs

If your spouse sells property and willfully conceals the profits, they could face sanctions from the court. The judge can order that your spouse not only give you 50% of the hidden asset but also pay your attorney’s fees and court costs. They might also face criminal penalties, including jail time and/or a fine.

Schedule a Consultation with Claery & Hammond, LLP

Once your divorce starts, there are several things your spouse (and you) cannot do concerning your assets. Because the property division stage is so complex, be sure to work with an attorney who can thoroughly examine your spouse’s documents and identify signs that assets might be hidden.

To speak with one of our San Diego lawyers, please contact us at (310) 817-6904.

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