To complete the financial separation process during a divorce, spouses must disclose and then divide their marital property. They must report their income and any assets they acquired, as well as any debts they assumed. They may negotiate with one another, or they may rely on the courts to address property division matters during litigation. In both scenarios, spouses with proof of dissipation can potentially seek a more fair and reasonable settlement based on the problematic financial conduct of the other spouse.
What types of behavior constitute the dissipation of marital income or assets?
1. Wasteful spending
Dissipation may take the form of wasteful spending either in the weeks leading up to a divorce filing or in response to the other spouse’s filing. This form of dissipation can involve emptying bank accounts or maxing out credit cards. Spending that clearly deviates from a person’s financial habits during the marriage could constitute dissipation and might influence the final settlement.
2. The destruction or disposal of marital property
Getting rid of valuable assets can substantially diminish the marital estate. If one spouse gives away a vehicle, sells electronics for a fraction of their true value or intentionally destroys property that belongs to the other spouse, those actions may constitute dissipation. Choosing to destroy or give away assets that both spouses technically share an interest in reduces the value of the marital estate.
3. Undermining the marriage
Dissipation can also entail financial conduct that damages the marital relationship, often without the knowledge of the other spouse. For example, the money spent on an extramarital affair that triggers a divorce could constitute dissipation. Funds spent on gambling or substance abuse issues could also be dissipation.
Identifying waste or destruction of marital resources and quantifying financial misconduct can help people pursue a fair property division settlement. Provable dissipation can significantly alter the final distribution of marital assets and marital debts.