Can My Spouse Sell Assets During a Divorce?

Going through a divorce is tough, but it’s even harder when you think your spouse is selling your shared assets. You may be wondering, “Can a spouse sell assets during a divorce?” This is actually a common question and experience for those going through a divorce. Recognizing this, we’re here to help answer your questions and break down the topic of selling marital property before divorce in this blog.

If you believe your marital assets are immediately being affected, it’s best to seek counsel right away. Our practice is focused on providing exceptional family law services in Colorado, and our team at Plog & Stein P.C. is here to help answer your questions. Call or contact us online today to ensure your interests are protected.

Table of Contents

1. Understanding Marital Assets
2. Separate vs. Marital Property
3. Husband or Wife Selling Assets Before Divorce
4. Can a Spouse Sell Assets During a Divorce?
   1. Temporary Orders
5. Steps to Take If Your Spouse Is Selling Assets
6. How Intent Impacts the Legality of Selling Assets During Divorce in Colorado
7. When Selling Marital Assets Is Allowed During Divorce in Colorado
8. Protecting Your Assets
9. Take Action to Protect Your Assets with Plog & Stein P.C.

Understanding Marital Assets

Marital assets are items purchased during the marriage. When you get divorced, a court will decide how to divide these assets fairly. Marital assets may include:

• Houses,
• Cars,
• Pets,
• Furniture,
• Jewelry,
• Art collections,
• Collectibles,
• Vacation homes,
• Boats,
• Retirement accounts,
• Savings accounts, and
• Investments.

Even if one person paid for these items, they still count as marital assets if bought during the marriage.

Separate vs. Marital Property

Not all property in a marriage is shared. Some items can be considered separate property. These are things one spouse owned before getting married or received as a gift or inheritance. Separate property can also include:

• Personal injury settlements awarded to one spouse;
• Property agreed to be separate in a prenuptial agreement;
• Businesses owned before the marriage; and
• Trusts set up for one spouse before the marriage.

If you’re unsure what counts as marital or separate property, you should ask your attorney.

Husband or Wife Selling Assets Before Divorce

If your wife or your husband is selling assets before divorce, it can cause problems. They may be trying to hide money or make sure that you don’t get your fair share. This action is not allowed and can be seen as hiding assets. Hiding assets means not being honest about what you own. It can involve:

• Selling property without telling your spouse;
• Transferring money to a secret account;
• Giving valuable items to friends or family to keep them hidden; and
• Undervaluing assets to make them seem worth less than they are.

Hiding assets is illegal and unfair. Courts take this behavior seriously and can impose penalties on the spouse who is hiding assets.

Can a Spouse Sell Assets During a Divorce?

In most cases, you cannot sell marital property during a divorce without your spouse’s permission. Courts in Colorado, like in other states, want to make sure everything is fair. They want both people to get what they deserve, and selling assets without agreement can be viewed by the court as unfair to the other spouse.

Temporary Orders

During a divorce, you can ask the court for a temporary order. This can stop your spouse from selling assets. It’s important to act quickly if you believe assets are being sold.

Steps to Take If Your Spouse Is Selling Assets

If you suspect your spouse is selling assets, you should take the following steps:

• Document everything. This is your first step to take after suspicion arises. Keep track of bank statements, receipts, emails or texts about selling property, and all financial activity.
• Talk to your lawyer. An attorney can guide you on what to do next. They might suggest filing for a temporary order to stop asset sales, investigating where the money from sold assets is going, or asking the court to penalize your spouse for selling assets.
• Court actions. If your spouse continues to sell assets, the court can step in. The judge might order your spouse to return the money, give you a larger share of the remaining assets, or impose penalties on your spouse.

Taking these steps quickly can make a big difference in protecting your financial interests. By acting promptly, you can prevent further loss of assets and ensure that your spouse faces consequences for any improper actions. Remember, the court’s primary goal is to make the asset division fair for both parties.

Providing solid evidence and working closely with your lawyer can help you achieve a fair result. Don’t hesitate to seek professional advice from the divorce attorneys at Plog & Stein P.C. to protect what is rightfully yours.

How Intent Impacts the Legality of Selling Assets During Divorce in Colorado

In Colorado divorce cases, the intent behind selling marital assets can play a significant role in how the court views the transaction. Colorado is an equitable distribution state, meaning marital property must be divided fairly, though not necessarily equally. If one spouse sells, transfers, or disposes of assets during the divorce process without a valid reason, the court may view it as an attempt to hide or waste marital property.

Courts scrutinize the intent behind the sale of assets closely. For example, if a spouse sells a car, cashes out a retirement account, or liquidates a joint investment to reduce the pool of divisible property, that action may be considered marital dissipation. Dissipation occurs when one party intentionally depletes marital assets to deprive the other spouse of their share.

If the court determines that the asset sale was made in bad faith, such as trying to avoid equitable distribution or punish the other spouse, the court can order compensation. This may include awarding a larger portion of the remaining marital property to the other spouse or requiring the selling party to reimburse the marital estate.

Because intent is a subjective factor, having a knowledgeable divorce attorney can help gather the documentation and evidence necessary to support or challenge a questionable asset transfer.

When Selling Marital Assets Is Allowed During Divorce in Colorado

While selling assets during divorce can raise red flags, there are exceptions where asset sales are legally permissible under Colorado law. In some cases, the sale is necessary or agreed upon, and does not negatively impact the division of marital property.

The most common legal exceptions include:

Mutual Agreement Between Spouses
If both spouses agree in writing to sell a marital asset, such as the family home or a jointly owned business, the sale can usually proceed without issue. This is often done to pay off joint debts or to split the proceeds evenly.

Court-Approved Sales
When an asset sale is needed to cover marital expenses, legal fees, or essential living costs, a spouse can request court approval. The court will weigh whether the sale is necessary and fair. In some cases, temporary orders issued during the divorce proceedings may specifically authorize the sale of assets.

Business or Investment Necessity
If one spouse owns a business and the continued operation requires liquidating or selling certain assets, the court may allow it, especially if it supports income generation for both parties during or after the divorce.

To protect your financial interests, it is critical to consult with a Colorado family law attorney before selling any assets while a divorce is pending. Improper sales, even without malicious intent, can lead to legal complications or affect how the court divides the remaining property.

Protecting Your Assets

If you think a divorce may be nearing for you and your spouse, it may be a good idea to start protecting your assets immediately. Even if you don’t suspect your spouse will hide or sell assets, taking precautions can save you a lot of trouble later. Being proactive can help you avoid misunderstandings and ensure a fair division of property.

• Set up a financial agreement. Before or during a divorce, set up a financial agreement that outlines what you and your spouse agree on about assets. It can prevent misunderstandings and protect your interests.
• Monitor financial accounts. Make sure to keep an eye on your financial accounts, watching for any unusual activity. If you see something odd, report it to your lawyer immediately.
• Stay informed. Know where your money and property are and how it’s being used. This knowledge can help you protect yourself during a divorce.

Taking these steps can give you peace of mind and better control over your financial future.

Take Action to Protect Your Assets with Plog & Stein P.C.

It can be stressful to think that your spouse may be hiding money or marital assets. But you have options. Reading this blog to learn more about the law related to marital and separate property is a great step in protecting yourself. Remember, you have the right to ensure you get a fair share—do not let your spouse convince you otherwise. To confirm your interests in the marital property, it’s best to speak with a family law attorney, like the ones at Plog & Stein P.C.

Serving Colorado since 1999, Plog & Stein P.C. focuses solely on family law cases. We have guided thousands of clients through divorce, always striving for the best outcomes. We understand that you only get one chance to secure your assets during a divorce, and our dedicated team is committed to making sure you get the right result.

Let us put our extensive experience and deep understanding of Colorado divorce law to work for you. Call or contact us online today to learn more about protecting your assets during a divorce.