Can I Sell or Transfer an Asset Before Filling for Divorce?

by Wayne Thomas
During a divorce, the court can void transfers if the intent is to shield property.

During a divorce, the court can void transfers if the intent is to shield property.

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Courts have the authority to divide property a couple owns as part of a divorce. This can lead to uncertainty over which spouse will own a specific asset, once the divorce is final. Although you may want to keep control over your property, a court has the authority to void the sale of any asset if your intent is to keep your spouse from getting it in the divorce.

Fraudulent Transfers

Once a divorce has been filed, some states place an automatic hold on the sale of property to ensure that the court has full disclosure of all marital assets that will be divided. Judges know that a spouse might attempt to hide assets, because the spouse knows that he is headed for divorce. For that reason, states do not allow one spouse to sell or transfer property if the intent is to keep it from the other spouse. In determining whether your transfer was fraudulent, a court will look at who the transfer was made to and how much you received in return. An example would be if, in contemplation of an inevitable divorce, you sold your ski cabin to your cousin for $1 in an effort to shield it from the divorce, and to keep it in the family. In this case, if the court finds that a fraudulent conveyance occurred, the transfer would be deemed void and the property would be subject to division during divorce proceedings.