Divorce is invariably a stressful time for the two spouses, with issues such as finances including spousal and child support often at the heart of the matter. If or when a partner deliberately wastes assets during the divorce to alter their financial position, it is legally termed as dissipation of assets, and if you think this is what your ex is doing this, then you must inform your divorce lawyers at www.culshawmiller.com.au.
What is Dissipation of Assets During a Divorce?
According to Black’s Law dictionary, dissipation is regarded as “the use of an asset for an illegal or inequitable purpose, like a spouse’s use of community property for their own benefit, especially when a divorce is apparent.” To put it simply, dissipation is wastage of marital funds or using any marital asset for any other purpose that doesn’t benefit a marriage.
Dissipation of assets can also be regarded as reckless spending or conduct, mainly if that money leaves the marital estate, which thereby reduces whatever remains to be divided during marriage or divorce.
What Qualifies as Dissipation or Wastage of Assets?
Some husbands or wives are tempted to using just about every any tactic they can to prevent having to divide assets with their wives or husbands out of spite. Because of this, when a spouse deliberately attempts to dissipate assets, they’re intentionally sabotaging their spouse’s attempts of getting their fair share of marital property, especially during a divorce settlement.
Dissipation refers to marital funds that are foolishly wasted for many things, such as:
- Gambling debts
- Purchase of a new car
- Spending on excessive gifts to friends or family members
- Making huge stock investments
- Spending money on extramarital lover or affair
- Huge business losses
- Extreme expenditure using a couple’s joint credit cards or account
How to Identify Dissipation
Extensive and detailed analysis of household expenditures may be needed to determine specific events of dissipated funds by use, dates, and dollar amounts. The amount of forensic work required to uncover those instances of dissipated funds depends on how much money or assets the spouse in question has dissipated. In other words, the more that they have hidden or relinquished, the more forensic work will be needed.
The forensic process will look into the timing and sources of the funds that have flown into the marriage, as well as the movement of those funds among several accounts operated by the accused party, and also the timing and ultimate uses of funds for unnecessary or destructive spending.
After that, the forensic expert will attempt to confer with clients to determine every known payee on documented transactions whether they are known or not. Any unknown payees will have to be researched and then identified.
What Will Happen if Dissipation of Assets is Discovered?
If the court finds that one of the spouses has indeed engaged in the dissipation of assets, it will affect the overall property settlement, as well as lead to consequences for that person.
Given that the court is asked to divide marital property among each spouse fairly, if one spouse has indeed been proven to have caused dissipation of assets, then whatever funds they wasted will be deducted from their property award.
And if a spouse has been found dissipating funds after a divorce has been filed, they may find themselves in contempt of court for failing to obey the court’s orders to preserve marital property.