Dividing property during the divorce is a difficult process. Spouses often disagree about what is reasonable. They may disagree about what assets they have to divide and how to split them in a fair manner.
Most of the time, spouses make appropriate disclosures to one another, negotiate and eventually reach a settlement. Other times, they litigate to resolve property division matters. In either scenario, accusations of financial dissipation could complicate the process. Dissipation is the technical term for intentionally diminishing the marital estate through wasteful spending or other irresponsible financial behavior.
What are the most common forms of dissipation that people may uncover when preparing for economic negotiations during divorce?
Spending too much on unnecessary purchases
Some people engage in dissipation before they file for divorce by going on a shopping spree or treating themselves to an overpriced spa day. Others might start accumulating property that they intend to use at their separate residence after they file for divorce. Whether one spouse empties out a joint bank account or racks up credit card debt, their spending habits could constitute dissipation.
Destroying or undervaluing marital property
Some people dissipate property by intentionally damaging marital assets. They might take a hammer to their spouse’s computer or high-cost gaming systems in a fit of rage. They might intentionally damage vehicles or real property. Other times, they may sell assets that are part of the marital estate for only a fraction of what they are worth. Intentionally destroying property, giving it away or selling it for an inappropriately low amount can constitute dissipation and can reduce the total value of the marital estate significantly.
Spending money on an affair
Dissipation can entail using resources that are part of the marital estate for a purpose that undermines the marital relationship. Those committing adultery often spend thousands of dollars on hidden cell phones, hotel rooms and even vacations. They may spend their income or a crew credit card debt while conducting their affair. The amount of funds that they waste on their extramarital relationship could significantly impact the property division process.
People who are able to identify and quantify the dissipation of marital property can potentially hold their spouse accountable during their divorce proceedings. Asking the courts to consider inappropriate financial conduct or presenting evidence of misconduct during negotiations can lead to a more reasonable final property division order.