The 31-year-old was granted bail on Monday after appearing on 12 charges including four counts of aggravated burglary, three counts of stealing and three counts of criminal damage.
Richmond chief executive Brendon Gale said Pickett was determined to still play against St Kilda at the MCG on Saturday night but the club decided to rule him out.
The utility failed to train at Punt Rd on Tuesday but will return to the club in coming days.
Pickett is expected to be considered for selection to face the Brisbane Lions in the Tigers' round-16 match after Richmond's bye.
"It's a decision we made in his best interest, in his welfare and also of the club," Gale said.
"We think it's important for Marlon to be with his family.
"But having said that, he'll prepare with the team, he'll train and he will keep turning up and engaging and turning up to work.
"I think he wanted to play.
"I think it's fair to say his teammates would have loved for him to play as well.
"But this is collective decision and we think it's right thing for Marlon, it's the right thing for the football program, it's the right thing for the club."
Pickett has played 70 games for the Tigers, having famously made his AFL debut in their 2019 premiership triumph.
The first VFL/AFL player in 67 years to debut in a grand final and the first since 1926 to win a flag, he won a second premiership with the Tigers in 2020.
Gale said the club were made aware of the allegations against Pickett "late last week" and that he would be required to speak to police after the Tigers' match against Fremantle in Perth.
"It's been a big shock (for Pickett) but he's OK," he said.
"Importantly, he's got some wonderful people around him. He's got the love of a good woman and his family and this football club has been wonderful."
Richmond and the AFL have been discussing Pickett's situation for a number of days and the league is comfortable with the Tigers' decision.
"We're dealing with allegations and Marlion's entitled to a presumption of innocence," Gale said.
"I haven't spoken with him directly, but he spoke with plenty of people within our team leading up to and post Sunday."
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