My Spouse Sold our Home Without Telling Me; What Can I Do?

One of the weirdest situations we deal with in divorce is when one spouse sells the marital home without telling our client.

The situation almost always goes something like this. Spouse sells home to a family member or close friend. Spouse sells home for cost, even though it’s worth more. Family member or friend then sells home for way more than he bought it, and then “pockets” the money.

I put pockets in quotation marks because the person selling the home isn’t keeping the sale money. Nope, what that person is doing is kicking back 90% of it to the spouse who sold them home.

See, this situation is a scam. In essence, the spouse sells the home at cost because if he sold it to stranger for fair market value, our client would be entitled to half of the equity in the divorce.

So, he sells it for no gain with the understanding that his buddy will sell the home for a big gain, cash out the equity check from the title company, and then give the lion’s share of the money back to the spouse. Magically, that money never makes it in to a bank account, so you can’t trace it and you can’t get to it in divorce.

Luckily, we don’t see this that often, but we do see it.

So, how do you deal with this?

The real question becomes: how do you deal with a situation like this?

Best way we’ve found is to file something called a motion for fraudulent transfer.

The point of the motion is to reverse the sale of the home and get it back in to the marital estate so it can be sold at fair market value during the divorce.

This motion comes up under the Utah Fraudulent Transfer Act (click here to read the Act), and usually requires you to file a separate civil case. But when it comes up in divorces, most judges will deal with it as part of the divorce case.

Another way we deal with it is to file a motion and let the Court know what’s happened, determine what equity existed in the home at the time of the fraudulent sale, and ask for 50% of that amount.

This second way is a little dicey because you’re chasing money, and that’s never as good as simply taking money from a home sale.

Bottom line: move quickly

If you’re in a divorce situation and you find out your spouse sold your home, you need to move quickly. If you wait to deal with the problem, it will probably be too late, and that big gain from the subsequent sale of the home will be gone forever.