Dissipation of assets in divorce refers to a spouse spending or wasting marital assets for non-marital purposes, often in anticipation of or during the divorce proceedings. This can significantly impact the equitable distribution of property, as the court may adjust the asset division to compensate for the dissipated funds.
What constitutes dissipation?
Dissipation generally involves a spouse using marital funds for activities unrelated to the marriage, such as:
- Extramarital affairs: Spending money on a new partner, including gifts, travel, or living expenses.
- Gambling: Excessive gambling or betting, especially if it depletes marital funds.
- Extravagant spending: Unnecessary or excessive purchases of items that don’t benefit the marriage.
- Transferring assets: Hiding or transferring assets.
- Business ventures: Engaging in risky or poorly planned business ventures that drain marital assets.
How is it addressed in divorce?
- Burden of proof:
The spouse claiming dissipation must prove that the other spouse spent marital funds for non-marital purposes.
- Court intervention:
If dissipation is proven, the court may order an adjustment to the property division, adding the dissipated value back into the marital estate or penalizing the spouse who dissipated the assets.
- Financial records:
Thorough examination of financial records, including bank statements, credit card bills, and tax returns, is necessary to identify potential dissipation.
Examples of dissipation:
- A spouse spending large sums of money on lavish vacations with a new romantic interest.
- A spouse incurring significant debt through gambling or excessive spending habits.