Earlier this year, we discussed how a spouse may be tempted to hide assets during a divorce. This is an illegal practice, and your spouse would likely be doing it to deprive you of those assets. An example of this is transferring a substantial sum to a family member, dividing assets in the divorce, and then getting that money back in full.
But there’s another issue that could come up, which is known as the dissipation of marital assets. Once again, the goal is for your spouse to keep you from getting the assets that you deserve. But the tactics they will use could be a bit different.
Spending the funds
Dissipation essentially just means spending the funds in an unordinary way. Some spending during divorce is necessary – such as simply paying the bills over the months that it takes to end the marriage. But intentionally spending just to waste the money could be an issue.
For example, say that you find out your spouse is having an affair and you file for divorce. Before the divorce is finalized, your spouse spends hundreds of thousands of dollars buying gifts and taking trips with their new romantic partner. The spending is reckless, but their goal is just to make it so they don’t have to split that money with you. They will waste it on their new partner in advance and then attempt to earn it back in the future. This is especially problematic if your spouse is a high earner and knows that they will be able to reacquire those funds – while losing 50% of the funds would be a significant financial blow for you.
If you believe that this is happening, it can make your divorce very complex, so be sure you know what legal steps to take.
