When you and your spouse decide to divorce, that is the time to be cutting back on your spending. You need money to pay lawyers and possibly save up for a new place to live.
However, not every divorcing person has that mentality. Some live it up, racking up credit card charges for new clothes, electronics, and even cars. They may go on vacations or gamble away the money. This reckless spending is called the dissipation of funds. It is a form of marital waste that can come with consequences.
It is difficult to prevent dissipation from happening since marital assets are typically shared by both parties. However, you should have some awareness of your finances, such as your bank account status. It is also a good idea to cancel any joint credit cards as soon as you decide to divorce. Once you find out about the reckless spending, you need to take action right away. This means documenting the acts so you can prove your case. Here is how.
It is not enough to make basic claims about reckless spending. You need to have proof. Evidence may be in the form of bank and credit card statements, Are there excessive, high-dollar charges on there? Do you have proof that your spouse is moving money around from one bank account to another?
Another thing you need to prove is that this behavior started around the time of the divorce.
When it comes to dissipation, the main question is: how long has this been going on? If the spending has been going on for years, with the other spouse’s knowledge, then it is not considered marital dissipation.
The courts also need to have a sense of when the marital breakdown occurred. How long have you and your spouse not been acting like a couple? Have you lived separately for some time? When did you stop having sexual relations with each other?
Dissipation cases often rely on patterns of spending to determine whether or not the spending was within norms of the marriage. You can strengthen your case by researching and securing financial documents for evidence. It will be good to have financial records from before, during, and after the breakdown of the marriage. That way, the court can compare the spending habits of your spouse during these times.
Here are some examples of situations in which judges have determined that dissipation had taken place:
- Failure to pay income tax on time, incurring substantial penalties
- Payment of income tax on non-marital income
- Contributions to a church not consistent with prior contributions
- Use of an insurance settlement to buy a new vehicle
- Unexplained use of a tax refund
- Creation of a trust for the children’s education without the other spouse’s knowledge
Contact Us Today
Many marriages end due to money matters, so when the financial issues continue on during the divorce process, it can be extremely frustrating. What do you do now?
Contact the Law Offices of Michael A. Robbins for help with your complicated divorce case. We will work hard to provide you with the best legal representation possible. Call our office at (248) 646-7980 or fill out the online form.