Dividing property is often one of the biggest challenges during divorce. Spouses have to put together inventories of their resources and determine what they are worth. They then need to negotiate with one another to determine how the assets will be divided.
In some cases, one spouse may accuse the other of dissipation of assets. They may hope to adjust the property division outcome because of the other spouse’s alleged financial misconduct.
What constitutes dissipation?
Dissipation involves the intentional destruction of marital assets. Any misuse of marital resources for purposes that damage the marriage could also constitute dissipation.
Malicious spending immediately before filing for divorce or in response to service is a common form of dissipation. One spouse might max out credit cards or empty a savings account on unnecessary purchases.
Other times, dissipation involves the physical destruction of property, the decision to give it away or the sale of assets for less than their fair market value. Dissipation can also involve the use of marital property when having an extramarital affair.
How do the courts address dissipation?
In most divorce cases, marital misconduct does not affect property division. However, there are exceptions for scenarios involving dissipation.
If one spouse has proof that the other wasted or destroyed marital assets, the courts can take that into consideration when dividing ownership of assets and addressing marital debts. The courts might make an unfaithful spouse repay the credit card debt they accumulated while cheating, for example.
Reviewing financial records can help people secure fair outcomes as they navigate the divorce process. Those who understand what kind of behavior can impact property division can recognize potentially actionable misconduct.