Removing Marital Property Before Divorce: Is It Legal?

If you’re considering removing marital property before divorce, you need to know that there are serious consequences for your actions. When a couple decides to get divorced, there are a lot of things that need to be sorted out. One of the most important is dividing up the marital property.

This can be a difficult process, and sometimes one or both spouses will try to hide marital assets from the marriage before it’s finalized. This blog post will discuss six reasons why it is a bad idea.

Is it Legal to Remove Items from the Marital Home Before Divorce?

Removing items from the marital home before divorce is not automatically illegal, but it can lead to legal complications. If the items are considered marital property, taking them without your spouse’s consent or a court order may be seen as dissipation or concealment of assets, which can affect property division during divorce proceedings.

Courts may view such actions as unfair or dishonest, especially if the removal appears intended to gain advantage in the divorce. It’s best to document any removals, get mutual agreement, or seek temporary orders to avoid legal consequences.

Six Legal Consequences of Removing Marital Property Before Divorce

Removing marital property before divorce can lead to serious legal and financial consequences. Courts may view it as dissipation of assets, especially if done without your spouse’s consent or a court order. This action could negatively affect property division during the divorce settlement.

1. It’s a breach of fiduciary duty

When you get married, you enter into a legal contract with your spouse. Part of that contract is the fiduciary duty each of you has to the other.

This means you are obligated to act in good faith and in your spouse’s best interests regarding financial matters. If you remove marital property before divorce, you breach that fiduciary duty.

In divorced couples, both parties are legally obligated to share equally in the property division, regardless of who earns more money or owns more assets. This obligation stems from each spouse’s legal spousal rights, which include the right to an equitable share of marital assets and fair financial treatment during the divorce.

Therefore, removing assets from the marital home before the divorce is finalized can significantly impact property division.

This can leave one party with less than half of the assets they are entitled to, which can be very unfair. It can also make it difficult for the other party to pay their fair share of debts and liabilities, further complicating the divorce process.

Therefore, keeping all marital property in the same condition until the divorce is finalized is important to ensure a fair and equitable division of assets.

This is especially true when dealing with high-value items such as real estate in divorce, where premature removal, sale, or transfer of ownership can seriously affect the final property division and may be viewed as bad faith by the court.

In some cases, a prenuptial agreement can help clearly define which assets are considered separate or marital, making the division process smoother and reducing conflicts during divorce.

Similarly, a postnuptial agreement signed after the marriage begins can also establish clear boundaries about property rights and asset ownership. These agreements can be especially helpful if significant assets are acquired during the marriage or if spouses wish to avoid potential legal disputes during a future divorce.

2. Accused of thief of community property

If you remove marital property before divorce, your spouse may accuse you of theft. In many states, all property acquired during the marriage is considered community property.

This means that it is owned equally by both spouses, regardless of who earned money to buy it or who is listed on the title.

If you take community property without your spouse’s knowledge or consent, you could be charged with theft. This serious crime can result in jail time and hefty fines. Additionally, it will damage your reputation and make it difficult to get divorced without going to court.

Your spouse may see it that way even if you don’t consider it theft. If they accuse you of theft, you will have to prove in court that you did not take the property to permanently deprive your spouse of it. This can be difficult, so avoiding removing marital property before the divorce is best.

Community property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, Washington, and Wisconsin) are strict about splitting everything up “equitably” or fairly based on the particular circumstances of the marriage. So, be careful if you are from any of the states.

3. It is considered as fraud:

Courts often treat attempts to transfer ownership of marital assets as fraudulent transfers. These actions are forms of asset concealment and can severely impact the divorce settlement.

Not only is removing marital property before divorce a breach of fiduciary duty, but it’s also illegal. You could be subject to criminal charges if caught hiding assets from your spouse.

In some states, this is considered fraud, and you may face a penalty for hiding assets in the divorce. Not only could you end up in jail, but you could also be ordered to pay restitution to your spouse.

This is money you would have to pay back to them for the value of the property you took. Additionally, if the family court finds that you committed fraud, they may order that all or part of your divorce settlement goes to your spouse. Family courts have wide discretion in dividing property and often penalize attempts to hide or illegally transfer assets.

This could leave you with less money and fewer assets than you would have otherwise had. Therefore, be honest with your spouse about your assets and not try to hide anything from them.

4. Easy to be caught:

These days, it’s easier than ever to catch someone who is trying to hide assets before divorce. During a divorce, both parties are legally required to go through a process known as financial disclosure, which is part of the broader discovery phase.

This requires full transparency about assets, debts, income, and liabilities. If you try to hide or remove marital property, your actions will likely be uncovered during this mandatory disclosure. This includes things like bank accounts, property, and businesses.

If you try to hide assets by removing them from the marital home, your spouse will most likely find out during discovery. If you are not telling the truth under oath about your property and assets, it constitutes a crime of perjury.

Additionally, if you are caught hiding assets, it will reflect poorly on you in court. The judge may view you as dishonest and untrustworthy, which could impact their decision in the divorce.

5. It will cost you more in the long run

If you remove marital property before divorce, you will spend more money in the long run. You will have to pay for an attorney to defend you against any charges of fraud or theft, and you will also have to pay for a forensic accountant to trace and value the assets you took.

This can be a very expensive process, and it’s one that you would likely have to pay for even if you are found not guilty of any crimes. In addition, if the court finds that you did remove marital property before the divorce, they could order you to pay restitution to your spouse.

This could be in addition to other financial obligations such as alimony, especially if the court determines that your actions placed your spouse at a financial disadvantage.

This means you would have to give back the value of the property you took. It’s important to weigh the cost of removing assets before divorce against the potential benefits. In most cases, it’s simply not worth the risk.

If you have to hire an attorney to help you hide assets, that’s additional money that could have been used to pay for the divorce.

If you consider removing marital property before divorce, speak with an experienced attorney first. They can help you understand this decision’s potential risks and consequences and help you make the best choice for your situation.

Removing marital property before the divorce can also have tax consequences. You may be subject to gift or capital gains taxes if you give away or sell assets for less than their fair market value. Additionally, if you try to hide assets by transferring them to someone else, you could be charged with tax evasion.

6. It will ruin the relationship

Finally, removing marital property before the divorce can damage your relationship with your children. If you have children from the marriage, they will likely be very upset if they discover that you hid assets from their other parent.

This can damage your relationship with them and make it difficult to co-parent after the divorce. Even this can make the divorce process more difficult and stressful than it needs to be.

If you have children, removing marital property before the divorce can also negatively impact them. Your children will likely see the removal of assets as a sign that their parents’ marriage is ending.

This can cause them a great deal of stress and anxiety. If you try to take custody of your children during a divorce, the court may view this as bad faith and award custody to your spouse instead.

The below video about marital property division in divorce actions might be helpful for you:

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FAQs on Removing Marital Property Before Divorce

How to hide money from a spouse before divorce?

There are a few ways to hide money from a spouse before divorce, but it’s important to remember that most of these methods are illegal. For example, you could try to transfer assets to someone else’s name, such as a friend or family member.

However, if your spouse can prove that you transferred the assets intending to hide them, you could be charged with fraud.

One of the easy ways to hide money from your spouse before divorce is to keep it in a safe deposit box or another location that your spouse does not know about. If your spouse finds out about the hidden assets, they could accuse you of hiding them, which could have serious consequences in court.

Hiding money before divorce amounts to breaking the commitment. The best way to protect your assets before divorce is to speak with an experienced attorney. They can help you understand the laws in your state and how to best protect your interests.

Can I remove furniture or other belongings before divorce?

No, you should not remove furniture or other marital belongings before divorce without your spouse’s consent or a court order.

Before the divorce, you can remove furniture or other belongings, but you should be aware of the potential consequences. For example, if you remove furniture that is considered marital property, your spouse could accuse you of hiding assets, which could have serious consequences in court.

If you try to take custody of your children in the middle of a divorce, the court may view this as an act of bad faith and award custody to your spouse instead.

What happens to separate property after divorce?

In a divorce, any property that is considered to be separate property remains with the party who owns it. This includes property that either party owned prior to the marriage and any property that was inherited or gifted to either party during the marriage.

Separate property is not subject to division in a divorce, and each party can usually keep their separate property after the divorce is finalized.

Can a court take a property in contemplation of divorce?

Yes, a court can issue orders affecting property in contemplation of divorce to prevent either spouse from hiding, transferring, or selling assets. This may include temporary restraining orders or injunctions to preserve marital property until final division.

Courts act to ensure a fair and equitable distribution during the divorce process. Sometimes, a court may order that a piece of property be sold and the proceeds divided between the parties; in others, one spouse may simply be given ownership of certain assets outright.

Of course, there are limits to what a court can do when dividing up property in a divorce. For instance, courts cannot arbitrarily take away all of one spouse’s property and give it to the other; there must be some justification for doing so.

Conclusion:

Always consult a qualified divorce attorney before making any financial moves. They can help you plan your divorce settlement legally and avoid penalties related to hidden or transferred assets.

Hiding marital property before divorce is a serious matter that can have many negative consequences. If you consider removing any property from the marital home, you should speak with an attorney first.

They can help you understand the risks and penalties of this type of action and guide you through creating a plan to protect your assets and ensure you get what you are entitled to in the divorce.

If you’re not yet ready for divorce, you might consider a legal separation. This formal status can still involve court orders for property division, support, and custody and attempting to remove or hide marital assets even during separation can lead to serious legal consequences.