Only occasionally will a divorce filing surprise a spouse. Much more often, divorce is the end result of a lengthy period of marital struggles. At a certain point the marriage is “irretrievably broken” and both spouses know the marriage is heading for divorce, or one spouse has already filed for divorce.
When a marriage is irretrievably broken, the couple’s thoughts often turn to financial matters. All marital assets are subject to property division by a court if the couple cannot agree to a division themselves. Marital assets include all assets acquired by either spouse during the marriage, with only a few exceptions such as inheritances.
This can result in a tricky financial situation when one spouse uses marital assets before a court can divide the marital property. If one spouse moves out and rents an apartment using marital funds, for example, does the court consider that when dividing assets? How should the court react if one spouse takes an expensive vacation alone?
When dividing property, a court can consider whether one spouse wasted marital assets by spending shared money in an improper way. The legal definition is “dissipation of marital assets,” and the court considers various factors when determining if a spouse has wasted marital assets:
- How close the expenditure was to the separation or breakdown of the marriage
- Whether the expenditure was typical for the marriage or spouse
- Whether the expenditure benefited both spouses, or only one
- The need by one spouse for the expenditure
Whether a court considers a purchase dissipation of marital assets is highly dependent upon the circumstances. In addition, dissipation is only one factor that a court considers when dividing marital assets. Still, dissipation can be an important factor, especially if it affects a large amount of marital property or involves high-value assets. If the court does find one spouse has wasted assets, the judge will likely divide the property in such a way that the spouse who did not waste shared assets receives a larger portion of the marital property.
The party accused of dissipating marital assets has the burden of proof to show that he or she did not spend marital funds for his or her sole benefit. Anyone contemplating divorce should be sure to keep receipts for spent marital funds; generally, simply telling the court that the money was spent for the benefit of both parties without proof is not enough.
The financial effects of divorce can be complicated. If you are considering divorce, contact an experienced divorce lawyer who can discuss your legal and financial options moving forward.