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Dissipation of assets may reduce your divorce settlement

| Jan 25, 2018 | Blog |

If your marriage is ending in a battle, there is no reason for you to expect the fight to be fair. In fact, you may have to be extra vigilant to ensure your rights are protected and you receive your share of community property according to Texas law. If you and your spouse did not make a prenuptial agreement, you may be facing the valuation of your business, forensic accountants combing through your records and passionate arguments over every dime and trinket.

What you may not expect is the spiteful behavior that often accompanies contentious divorces between high-earning spouses. You may have heated disagreements over which items are individual or community property, and there will certainly be disputes over who gets what. However, you may also be dealing with the dissipation of marital assets by your spouse.

What does dissipation look like?

Dissipation of martial property occurs when one spouse wastes or squanders assets meant for division in a divorce. This is not normal spending, but excessive and wasteful for the sole purpose of keeping you from getting it. Your spouse may fully understand that misusing the money or other assets means he or she will also not have them after the divorce. The point is to keep them from you.

Your spouse may do this in countless ways, including:

  • Buying lavish gifts for someone else
  • Taking extravagant vacations
  • Spending money on a romantic interest
  • Gambling
  • Racking up credit card bills
  • Damaging marital property to lessen its value

You should be aware of the automatic temporary restraining order, which the court should have issued at the beginning of the divorce process. The ATRO orders spouses to maintain the status quo in the marriage until the divorce is settled. This means earning, spending and using the marital assets in the same manner as before the filing of papers.

What’s the next step?

It isn’t always easy to prove that a spouse is dissipating assets, and you may need the assistance of a forensic accountant to help you find evidence that will hold up in court. If your spouse was accustomed to spending big and wasting money prior to filing for divorce, there may be little you can do about the continued spending.

However, if your spouse is violating the ATRO, or if you are not sure if such an order was part of your divorce, you would do well to protect yourself by learning about your options and taking steps to stop the wasteful spending.

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