When a marriage is headed toward divorce, the division of assets becomes a critical concern. But what happens if one spouse decides to sell an asset before the divorce proceedings begin? This situation can cause confusion and potential legal complications, especially if the sold asset is part of the couple’s community property.
In Texas, community property is any asset acquired by either spouse during the marriage, with a few exceptions like gifts or inheritances. Since Texas is a community property state, both spouses have an interest in these assets, and they are typically divided equally upon divorce.
So, what if a spouse sells a community asset without the other’s knowledge? Let’s break down the legal implications, protections under the Texas Family Code, and how such situations can be handled in divorce proceedings.
For personalized advice, please contact Attorney Tyler Monahan, partner at Turner-Monahan, PLLC, to discuss your case.
Community Property and Asset Division in Texas
Community property includes all income and assets acquired during the marriage, except for certain separate property, like gifts or inheritances. This means that regardless of whose name is on the title, the asset is considered to belong to both spouses equally.
When divorcing, the division of this community property—such as homes, cars, bank accounts, and investments—becomes a key issue. Under Texas law, this division is typically a 50-50 split unless a court determines that a different split would be more equitable based on various factors, including each spouse’s financial situation, fault in the marriage, or contributions to the community estate.
The problem arises when one spouse attempts to sell or dispose of a community asset without consulting the other.
Selling a Community Asset: Is It Legal?
While it’s possible for one spouse to sell or transfer an asset, doing so without the other spouse’s consent or during a divorce can violate Texas laws, particularly under the Texas Family Code. According to Section 3.102 of the Texas Family Code, both spouses have an equal interest in community property, and one spouse cannot unilaterally dispose of certain assets without the other’s agreement.
If a spouse sells a community asset before a divorce is filed or finalized, it may be considered a breach of the fiduciary duty that each spouse owes to the other. This fiduciary duty implies that both spouses must act in each other’s best interests when managing community assets.
Let’s consider a common example:
A husband decides to sell the family car, which is community property, without telling his wife. If this sale occurs just before the divorce is filed, the wife can raise this issue during the divorce proceedings. The court may then take this into account when dividing the remaining community property. In some cases, the court may even order the husband to reimburse the wife for her share of the asset’s value.
Example Scenarios: What Could Happen?
Sale of a Vehicle
Imagine that a couple owns two cars, both bought during the marriage. Before the divorce is filed, one spouse sells one of the cars without the other’s knowledge. The court could consider this an unauthorized transaction and may order the sale proceeds to be divided between both parties. If the sale occurred at a price below market value or involved fraudulent intent, the wronged spouse might receive additional compensation.
Transfer of Investment Accounts
If one spouse decides to transfer funds from a community investment account into their personal account, the other spouse may challenge this action in court. The Texas Family Code would likely see this as a violation of fiduciary duty, and the court could order the transfer of funds back to the community estate or require reimbursement.
Protecting Yourself from the Sale of Community Assets
If you suspect that your spouse may attempt to sell or transfer community property before or during a divorce, there are several steps you can take:
File for a Temporary Restraining Order (TRO)
A TRO can prevent your spouse from selling or transferring community assets during the divorce proceedings. This legal order temporarily freezes the community property to ensure that no significant changes are made to the assets before the court can make a fair division.
Request a Financial Disclosure
During divorce proceedings, each spouse is required to provide a full financial disclosure. If assets have been sold or transferred without your knowledge, this will be revealed in the disclosure, and you can seek remedies through the court.
Consult a Divorce Attorney
It’s crucial to consult with an experienced divorce attorney who can guide you through the process and protect your rights. The attorney will help you navigate the complexities of the Texas Family Code, ensuring that any wrongful sale or transfer of assets is addressed appropriately.
Turner Monahan PLLC – Here to Support You
If you find yourself in a situation where your spouse has sold or transferred a community asset without your consent, it’s important to act quickly to protect your rights. Turner Monahan PLLC has been serving families for over 50 years, providing expert legal assistance in divorce and family law matters. Schedule a free, no-obligation consultation with attorney Tyler Monahan to discuss the details.
Disclaimer
The commentary and opinions are for informational and educational purposes only and not to provide legal advice. You should contact an attorney in your state to obtain legal advice concerning any particular issue or problem. You can become a client and enter the attorney-client privilege only after hiring Turner-Monahan, PPLC, by signing a written retainer agreement.
