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Do you think your spouse is intentionally wasting marital assets?

On Behalf of | Nov 22, 2019 | Uncategorized |

Quite a few different issues can impact the way that you split up your possessions and debts when you divorce. The total value of your marital estate will include all of your acquired assets and equity adjusted for the total amount you owe in debt, such as credit card balances and the amount still due on your mortgage.

The courts will use information that you and your ex provide to determine what is fair and reasonable when splitting your assets and debts. Equitable distribution laws allocate much of what you acquire or earn during marriage to the marital estate, which means those assets get shared between spouses, regardless of how much money either individual spouse earns.

Unfortunately, some people will do just about anything to reduce what their spouse gets in a divorce. Some people hide assets by creating a secret bank account or moving items worth a lot, like art or jewelry, out of the home before filing. Other people decide to simply diminish the total value of the marital estate buy accumulating a lot of debt or giving away assets before the divorce.

Intentionally wasting shared resources may be marital dissipation

When one person chooses to incur debt or get rid of valuable assets out of pettiness or spite with the intention of reducing the assets someone else receives, the courts often refer to this practice as dissipation. Dissipation can look like one spouse spending a lot of marital assets as a means of getting back at the other.

Incurring substantial debt by maxing out credit cards shared with your spouse or emptying bank accounts to fund frivolous purchasing or gambling trips are both examples of how spouses can intentionally reduce the marital estate through shopping or purchasing habits.

Dissipation could also look like spending marital assets on something damaging to the marriage, such as an affair. The courts may alter the marital estate to reflect this improper use of funds. Finally, dissipation could involve the sneaky relocation or undervaluing of certain assets, often by selling or giving them away.

Selling or giving away valuable items is a red flag

Shopping sprees and wasteful spending can easily come back to impact someone negatively in a divorce. After all, there is a straightforward paper trail showing that someone spent the money wastefully and intentionally.

In order to avoid such obvious allegations of dissipation, some people approaching divorce will use a different method to reduce the marital estate. Specifically, one spouse may give away valuable possessions to friends, family members or even co-workers. Other times, they will sell a valuable item for a tiny fraction of what it is actually worth. Selling a vintage car for $100 would be an example.

After the divorce, they will reclaim or buy back these items, thereby avoiding the need to share their value with their spouse in the divorce.