Intentional Dissipation Of Marital Assets

During a divorce or separation, it is not unheard of for one spouse to empty the couple’s bank accounts and use the money for their own purposes. If this happens, it is known in Maryland law as the intentional dissipation of marital assets, and you should talk to an attorney about it because it can become a factor in how assets are divided during the divorce. Our Maryland family law attorneys at Shah & Kishore can assist with this and other divorce-related complications.

What Is Intentional Dissipation Of Assets?

Dissipated assets are property that was part of the marriage but no longer exists when the divorce is finalized. The intentional dissipation of assets can happen when one spouse wastes, sells, or spends marital assets to reduce what the other party receives in the divorce.

In addition, dissipation can occur through deliberate actions, such as buying things, or inaction, such as not filing a tax return. The family law court will consider dissipated assets as if they still exist and will assign a value to it, just like the other assets from the marriage. Here are some examples of intentional dissipation of assets during a divorce:

  • The husband goes on a pricey vacation to Hawaii, invites his friends, and pays for their room and board.
  • The wife takes a trip around the world by herself, even though it costs $75,000.
  • One party starts to make expensive purchases, such as vacations, cars, and furniture, for a third party.
  • One spouse gives money belonging to both parties to a family member.
  • Large amounts of money are missing from joint accounts without explanation.

How Do You Make A Claim For Intentional Dissipation Of Assets?

If you think your spouse dissipated marital assets, you must tell the court about it. Then, you need to prove that the marital funds that were spent on things unrelated to the family. Note that the court will not consider it dissipation of assets when one person uses marital property to maintain their lifestyle during the marriage.

Second, you must show the marital property was purposely spent to lower the assets available for distribution equitably during the divorce. The judge will review the timing of the money spent, whether the activity was hidden, and how much money was involved.

The spouse accused of dissipation must prove that they spent the marital assets for appropriate reasons. For example, they might argue that the property spent would not have been equitably distributed. Or the expenditures made did not have an impact on what was available for equitable distribution. Other possible reasons could be:

  • The expenses were for family purposes.
  • The other person consented to the money being spent or was aware and did not say anything.
  • The money spent was simply bad judgment or bad luck.

There are situations where what you think is a dissipation of assets is not. For example, it is not dissipation if you transfer one asset to another asset that has the same value. It also is not if you pay off marital debt or debt that is jointly titled. In addition, paying legal fees for criminal defense and investing on speculation carefully are not considered intentional dissipation of assets.

How To Deal With Intentional Dissipation Of Assets

Your family law attorney should be your primary resource if dissipation is a concern in your divorce. Your lawyer can trace almost anything your spouse spent during the marriage and can obtain the necessary documents to make a dissipation claim.

Remember that your spouse’s lawyer could review any expense you make during the divorce and could be used against you in an intentional dissipation claim. Also, remember these points:

Size Is Not Everything

If you or your ex dissipated items that are not of great value, it will not stop the family court from changing the resource allocation accordingly. This is even if you determine that the cost of making a dissipation claim is more than the potential benefit.

Reduce Expenditures On Vices

Spending too much on gambling, drinking, or other vices could be grounds for an intentional dissipation of assets claim. Also, bad economic behavior can be viewed as a fault that influences the court’s discretion when making an equitable division of marital property.

Reduce Asset Transfers

Did you or your spouse transfer funds to a family member or someone else? Then, one party could be allocated other assets to make up for what was lost in the asset transfer.

What About Business Expenses?

A business expense is not typically considered asset dissipation if it is related to the business operations and is not excessive. Note that making a bad business decision is not usually considered dissipation by the courts.

Be Careful With Gifts

If you have a new significant other, be careful about spending marital assets on gifts for that person. This could be considered a dissipation of assets and may lead to an adjustment by the court. Unfortunately, this behavior often upsets the other spouse and could reduce the chances of settlement.

How Maryland Courts View Dissipation

The family court requires both parties to provide financial disclosures in the divorce filings. Suppose the judge discovers one party dissipated assets, hid assets, or wanted to defraud the other party by taking marital funds. In that case, that person may receive less marital property in the divorce. If, for example, a wife accuses the husband of intentional dissipation of assets, she must prove how he used the money for his own gain.

Maryland uses an equitable distribution model when dividing marital assets. The court will attempt to make a fair division, but not necessarily 50/50. If dissipation of marital assets, the court counts whatever was spent like it is still in the estate. So, the party that spent money or assets will lose in the end.

Contact Our Maryland Family Law Attorneys Today

If you are facing divorce in Maryland, many parts of the situation could require an attorney’s help. Intentional dissipation of assets is a serious matter that can have a significant effect on the outcome of your divorce. Contact our Maryland family law attorneys at Shah & Kishore at (301) 315-0001 for help with the intentional dissipation of assets.

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