Family Law

Property Division in Divorce: Wasting Assets

Things can turn ugly when a marriage is breaking apart. It's not unusual for a husband or wife to destroy, gamble or give away marital property to keep their spouse from getting it in the divorce.

In legal terms, this is known as the "dissipation of assets" or wasting marital assets. It can be a husband buying lavish gifts for his mistress or a wife maxing out her credit cards on a spending spree. It involves a spouse wasting property that would otherwise be distributed in the couple's divorce.

If your spouse is wasting assets, a court can consider this behavior when making decisions on how to divide the property in your divorce case. The court could award you more property or alimony to make up for the loss caused by your spouse's wrongdoing.

What Is the Waste or Dissipation of Assets?

The wasting or dissipation of assets involves the frivolous and unjustified spending of assets by a spouse. There must be more than just the mismanagement of property or spending in a way that's disapproved of by the other spouse. Instead, there must be evidence of intentional misconduct.

If you are trying to decide whether your spouse's actions amount to wasting marital assets consider:

  • The timing of your spouse's transaction; did it occur close to the time you separated or decided to divorce
  • Did your spouse's spending benefit your marriage or was it for a purpose entirely unrelated to your marriage
  • Was your spouse's spending excessive or minimal
  • Was the expenditure or transaction typical before the breakdown of the marriage
  • Did your spouse intend to hide, deplete or divert an asset

Effect of Waste on Division of Property

State laws vary on whether divorce courts can consider a spouse's wasteful actions when the court divides the couple's property. In some states, the law specifically says a court should consider the dissipation of assets by a spouse. In other states, wasting of assets can be considered when dividing property even though it's not specifically listed in the statutes.

State laws also vary on how courts treat the timing of the wasteful actions. Some states require the wasting of assets to occur after the marriage breaks down. Other states don't have the breakdown requirement, but instead look at whether the expenditure was made intentionally to deprive the other spouse of his or her property rights upon divorce.

Actions Considered Wasting or Dissipation

The following actions could be considered to be the wasting of assets, especially if they occur after the marriage breaks down:

  • Gambling losses
  • Money and gifts given to a spouse's lover
  • Legal fees and forfeiture of property resulting from a spouse's criminal activities
  • Gifts by one spouse to the couple's children or family members
  •  Failure by a spouse to make mortgage payments, resulting in foreclosure
  • Business losses caused by a spouse

Talk to your divorce attorney as soon as possible if you think your spouse might hide or waste your marital assets. Your attorney may be able to get a court order to freeze your accounts and protect your property during your divorce.

Questions for Your Attorney

  • After we separated, my husband lost his job. Could that count as the dissipation of assets?
  • After I asked for a divorce, my spouse withdrew funds from her 401K without my knowledge. Should I ask to get part of that money back in our divorce?
  • My spouse spent a lot of money on a trip with friends when we separated. Can I recover some of that money?

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