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Why you can’t sell community property for $1

On Behalf of | Jan 9, 2024 | Divorce

Every state follows its own rules when it comes to the division of marital assets when a couple divorces. California is what is known as a “community property” state, which means that (with a few exceptions) everything a couple acquires after their marriage begins is considered to be jointly owned and subject to a 50/50 split.

When a couple can’t agree on who gets to keep certain items that cannot be divided, those assets may have to be sold so that the proceeds can be split. That has occasionally inspired someone to sell everything from sports cars to valuable collections for a nominal sum – like $1 – just so they can enjoy the look on their spouse’s face when they hand them their share (50 cents).

This is called dissipation of assets, and it is not a good plan

When one spouse wastes or misuses marital assets, that’s called “dissipation,” and it can result in big trouble for the spouse who does it. Typically, allegations of dissipation come about after one spouse has squandered some of the marital funds after a divorce petition is filed on anything from expensive shopping trips to gambling or affairs. 

However, selling marital property for a nominal price can also be deemed dissipation, and the courts don’t take kindly to that kind of behavior. The family court can (and likely will) attempt to even things back out. That could mean giving your spouse a greater share of any assets that remain, giving you more of the marital debts (which also must be divided), requiring you to pay additional spousal support or simply requiring you to repay your spouse for their share of the items’ fair market value.

It’s normal and totally understandable if you’re frustrated and angry with your spouse. Don’t let your feelings lead you into doing something that you’ll later regret. It’s better to seek experienced legal guidance before you do anything with the marital property that could end up creating problems with your divorce.