Experience and Care You Can Rely On

What can count as marital asset dissipation during divorce?

On Behalf of | Jan 5, 2024 | Property Division

A usual point of contention during divorce is who gets what. New Jersey follows an equitable distribution rule that divides marital properties fairly but not necessarily equally. Courts consider a comprehensive list of relevant factors to determine how to split assets between spouses.

However, a spouse who intentionally squanders money can complicate the situation and prevent a just property distribution. The state pertains to this financial misconduct as dissipation, which is a spouse’s unreasonable use of marital funds for their benefit and deprives the other party at a time when the marriage is breaking down.

Common forms of dissipation

Not all excessive or reckless spending can automatically count as dissipation. The following are some examples that can be classified as dissipation:

  • Selling valuables for less than their worth to pay off personal debts
  • Purchasing expensive items or booking luxurious accommodations for an extramarital affair
  • Withdrawing substantial amounts of money for undeclared reasons and without the other party’s consent
  • Wiring substantial cash to family members or other third parties without discussing it with their spouse

Judges often weigh a dissipation claim by considering if a spouse is aware of the financial misbehavior yet condoned it. They may also assess the offending spouse’s deliberately deceptive timing in relation to the divorce proceedings.

Potential consequences of dissipation

With properties on the line, it is quite common for spouses to try to gain an unfair advantage through dissipation. However, aggrieved spouses can fight back. They can benefit from having a legal team helping them build a strong case. As a result, the judge may ask the offending spouse to return the dissipated funds to the marital pot or award a more significant share of the marital wealth to victims for their troubles.