Dissipation of Marital Assets

Substantial Spending or Moving of Assets Prior to Divorce Should Raise Alarms

by Michael Heath

Divorce is a very emotional process. Anger often causes a husband or wife to act in ways they never would when the marriage was intact. One spiteful reaction could be to waste away marital assets to deprive the other spouse of them. If a partner becomes aware of irregularities, it is imperative to seek the counsel of an attorney experienced in financial issues.

Things People Do

Money and assets brought into the marriage are almost always considered community property and neither should squander away what belongs to both husband and wife. It is not unheard of for a spouse anticipating divorce to hide assets, spend frivolously, or give things away. Here are some examples:

• Giving large sums of money to reliable relatives or friends to be retrieved later
• Purposely destroying property
• Spending to support a gambling, alcohol, or drug habit
• Transferring a valuable collection to an undisclosed location
• Allowing a real estate investment to go into foreclosure or disrepair
• Taking out a loan without their spouse’s consent
• Going on lavish shopping sprees to run up credit card debt
• Using substantial monies to support an extramarital affair

Get a Divorce Attorney

Mediation, collaborative divorce, arbitration, and do-it-yourself divorce all have their places. These approaches to ending a marriage all rest on a foundation of trust. If there is expected dishonesty of a material fact, then none of the methods can work. Dissipation of significant marital assets disqualifies any alternative to divorce litigation. Buying a dress or going out for a steak dinner with some buddies when money is tight is bad judgment rather than outright malice. However, if it appears that there is some ill intent or recklessness that is frittering away the marital assets then a good attorney with experience in financial issues must be contacted. A judge will likely be unable to recover money or property that disappears. A lawyer has the power of the court to take some action. This may include motioning for a temporary restraining order to control spending or even having accounts frozen.

Remedies to Lost Marital Assets

Money or property that still exists could be clawed back if it was transferred inappropriately. It is possible for a judge who recognizes fraud to award an innocent spouse a greater portion of the marital assets or to saddle a blameworthy partner with more debt. That does not mean anyone should rely solely on the judicial system to make things right. Time is of the essence. The longer bad financial activity progresses, the more difficult it is for a lawyer to prevail in the halls of justice.