What Counts As Dissipation Of Assets In A Divorce Case?

By Sara Pitcher

Cordell & Cordell Divorce Lawyer

Dissipation is defined by the Black’s Law Dictionary as: “The use of an asset for an illegal or inequitable purpose, such as a spouse’s use of community property for personal benefit when a divorce is imminent.”

Some jurisdictions automatically impose a temporary restraining order on finances, which prohibit dissipating, selling, transferring, encumbering, or wasting of marital assets during the pendency of the divorce.

This restriction allows the parties to spend money or manage their property as necessary. However, it prohibits the wasting, destruction, or getting rid of marital property without the approval of the other party.

This ensures that the property of the marital estate remains so the court may equitably divide it. It prevents one party from selling or destroying property for their benefit.

If dissipation takes place after the initial filing for divorce despite the temporary restraining order, then the court may set aside the dissipated property to the spouse who caused the dissipation in addition to other remedies.

 

Dissipation’s Effect on Property Division

Additionally, dissipation can play a role in property division. If a spouse wasted or misused marital funds throughout the marriage, then the other spouse can raise the dissipation argument and request an unequal division of the marital estate.

This would involve the dissipated property being set aside to the spouse who caused the waste or misuse and the other spouse would receive property to counterbalance that.

 

Dissipation of Assets Examples

Some examples of dissipation may include a gambling problem, an alcohol or drug problem, spending money on a boyfriend or other third party, etc.

The spending must be wasteful, excessive, and cannot have been condoned or approved by the other spouse. Some judges may find that excessive spending on gambling or lottery tickets by Wife was condoned if Husband bought Wife lottery tickets for her birthday.

Additionally, it may be a more effective argument if Husband encouraged Wife to seek help or discouraged her spending on gambling and took additional action to try to stop the gambling or excessive spending.

It is much less effective if Husband was aware of the excessive spending on gambling for a substantial length of time and took no action to try to curb the behavior; then the judge may find that Husband condoned or excused the action and should share in the loss.

Spending on a significant other or third party that was unknown to the spouse is a common example of dissipation of assets and is discussed in the article, “Dissipation of Assets by Spending Money on My Girlfriend.”

 

To arrange an initial consultation to discuss divorce rights for men with a Cordell & Cordell attorney, including Noblesville, Indiana Divorce Lawyer Sara Pitcher, contact Cordell & Cordell.