Deciding to end a marriage is already difficult, but the legal process that follows can make it a nightmare, especially when it comes to dividing marital assets and debts.
In some cases, one spouse may try to hide, sell off, or transfer assets in anticipation of divorce. Known as “asset dissipation,” this underhanded tactic aims to reduce the value of the marital estate prior to divorce and prevent the assets from being divided equitably.
If you suspect your husband is selling assets before your Minnesota divorce is finalized, it’s crucial to understand how this impacts property division and your legal rights. In this article, we’ll explore the implications of a spouse selling assets before a divorce and provide guidance on steps you can take.
How Selling Assets Impacts Divorce in Minnesota
Minnesota is an “equitable distribution” state when it comes to dividing marital property during divorce. This means assets and debts are divided in a fair manner, though not necessarily equally.
The court aims to distribute marital property in a way that considers the contributions and circumstances of each spouse. If one spouse secretes away or sells assets, it interferes with the court’s ability to make an informed and fair distribution.
Marital vs. Non-Marital Property
Under Minnesota law, all assets and debts acquired during the marriage are considered marital property and subject to division, with some exceptions. This includes:
- Homes
- Cars and other vehicles
- Bank accounts
- Retirement and investment accounts
- Businesses
- Personal property like jewelry, collectibles, furniture
Separate or non-marital property that is owned solely by one spouse is generally not divided. This can include:
- Inheritances
- Gifts to only one spouse
- Property owned before the marriage
- Personal injury settlements
However, the lines can become blurry if the separate property has increased in value during the marriage or marital funds were used to improve it. An experienced family law attorney can help you understand how different assets may be classified.
Implications of Selling Marital Assets Before Divorce
If one spouse sells marital property without the consent of the other spouse, it can significantly impact divorce proceedings and property division. Some potential consequences include:
- The court may award the other spouse more assets to compensate for dissipated assets. For example, if a husband sells $100,000 in stocks, the wife may be awarded a greater share of the remaining marital property.
- The spouse who sold assets may be ordered to account for the proceeds. If your husband sold a classic car for $30,000, the court could demand that he provide records showing what was done with the money.
- A spouse could face contempt charges for violating court orders. Most Minnesota divorce cases involve automatic court orders prohibiting selling or transferring property without consent. Breaking these orders can lead to fines or even jail time.
- Attorney’s fees may be assessed against the spouse who dissipated assets. You may be able to recover legal costs associated with tracking down sold assets and building your case.
Clearly, there are significant risks associated with one spouse selling off property in anticipation of divorce. Not only does it derail mediation and settlement negotiations, but it can also lead to an unfair outcome for the other spouse.
Spotting Signs Your Husband is Selling Assets Before Divorce
Since assets are valued at the time of divorce, it’s common for one spouse to try selling property ahead of time at lower values. This devalues the marital balance sheet they’ll later split.
Some red flags your husband may be liquidating assets include:
- Cashing out investment and retirement accounts
- Putting marital property up for quick sale at below-market value
- Transferring ownership of assets to other family members
- Making unusually high credit card or tax payments
- Taking on new debt against property
Sudden movements of money and changes in account balances can also signal asset dissipation. Be on the lookout for your husband transferring funds between accounts or making abnormal withdrawals. Pay attention and document any shady financial activity.
What to Do If You Suspect Your Husband is Hiding Assets
If you have concerns your husband is selling or concealing marital property in anticipation of your divorce, don’t delay taking action. Here are some steps you can take:
- Speak with a divorce attorney immediately. An experienced family law attorney can advise you on the best response and start tracking down records related to any asset transfers.
- Gather financial records. Collecting bank statements, investment reports, tax returns, credit card statements, and other financial paperwork can help uncover dissipated assets.
- Secure important documents. Make copies of all financial documents, records of home improvements, business holdings, and relevant communications. Store them in a safe location, like a safe deposit box that only you can access.
- Change account passwords. Update passwords and PINs for your personal bank accounts and credit cards to prevent unauthorized access.
- Inform your divorce attorney of suspicious activity. Keep a detailed log of any transactions, money movements, or property sales you find questionable. Report them to your divorce lawyer promptly.
- Seek temporary court orders. Your divorce attorney may petition the court for restraining orders to prevent your husband from selling additional marital assets.
By hiring a lawyer and taking proactive steps upon the first suspicion of asset dissipation, you’ll be in a much stronger legal position to contest unfair division and hold your husband accountable.
Consequences of Selling Assets Before Divorce in Minnesota
Hiding or selling marital assets without your spouse’s consent doesn’t just damage trust—it can undermine the entire divorce process and result in clear legal penalties.
Some potential consequences a husband faces for selling assets in anticipation of divorce include:
- Being held in contempt of court for violating automatic divorce injunctions prohibiting unauthorized property sales
- Owing 100% of the asset value and proceeds to the marital estate
- Having to pay attorney fees and court costs related to investigating dissipated assets
- Receiving a smaller overall share of marital property
- Accruing debt from new mortgages or loans taken out against property
- Facing perjury charges for lying about asset’s existence or value
- Paying fines and even serving jail time in cases of egregious deception
The reality is selling joint property without agreement can irreparably damage the divorce process. Not only does it eliminate assets from the marital pot, but it breaks trust and intensifies conflict during an already difficult time.
Protecting Your Rights With a Divorce Lawyer’s Help
If you believe your husband is trying to undermine a fair marital settlement by selling assets, immediately speak with an experienced Minnesota divorce attorney. With legal guidance, you can stop additional dissipation and recover proceeds from sold property.
An attorney can also help you:
- Track down transferred assets: An attorney has the knowledge and resources to follow paper trails and uncover where the proceeds ended up. Bank records, title transfers, and credit reports can point the way.
- Secure a restraining order: Getting a temporary injunction can bar your husband from selling more marital assets during the divorce. The court can hold him in contempt for violating its orders.
- Demand records and accountings: The court can order your husband to produce records related to any property he sold or transferred. Failure to account for assets provides leverage for a more favorable settlement.
- Obtain reimbursement for legal fees: If asset dissipation is proven, you may be able to recoup lawyers’ fees spent in investigating and recovering sold-off property.
- Negotiate a fair settlement: Experienced divorce counsel will work to protect your legal rights and negotiate a property division that compensates for any assets your husband sold off.
Don’t let yourself become a victim of shady pre-divorce financial tactics. The experienced family law attorneys at Martine Law provide diligent advocacy to protect your rights and help ensure marital property is divided equitably. To discuss your situation in confidence, contact us today for a consultation.
