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Wasteful Dissipation of Assets in New York Divorce


What Is Wasteful Dissipation?

Wasteful dissipation, which is also referred to as martial waste or asset dissipation, refers to the intentional act of destroying, depleting, or wasting marital assets. Either spouse can be guilty of wasteful dissipation during the breakdown of the marriage or in response to their divorce. For instance, a spouse with a gambling addiction or who has had an extramarital affair may have used marital funds and assets to fund these activities during the couple’s separation. On the other hand, after being served papers, a spouse, out of spite, might intentionally make several large purchases with marital funds.

Examples of Wasteful Dissipation

Marital waste can include (but is not limited to) the following acts.

  • Excessive or needlessly frivolous spending
  • Selling assets for below market value
  • Funding an extramarital affair
  • Failing to preserve or maintain an asset (so that it loses value)
  • Excessive gambling
  • Excessive spending on partying, drugs, alcohol, and/or illicit activities
  • Transferring funds to other people without explanation or reason
  • Excessive spending on business expenditures

How Does Wasteful Dissipation Affect Equitable Distribution?

There are many potential consequences of wasteful dissipation, including facing serious financial consequences that aim to compensate the victim (similar to how civil court cases operate). Potential consequences for the spouse guilty of marital waste include:

  • Forced return of the assets. The court may order the guilty party to return the assets to the marital estate. However, this solution only works in cases where the guilty party still has access to the money, which is often the case if they transferred the assets to another person. Once the assets have been returned, the equitable distribution process can proceed as normal, yet in some cases, the court may further penalize the guilty party by awarding them less of the marital assets in the final agreement.
  • Deduction from the settlement award. If the assets are not able to be returned, the guilty party’s portion of the marital assets may be deducted to compensate the other party for the loss. For instance, if your spouse wasted $10,000 of marital funds, the court will move forward with the division as if the wasteful party owes the other that amount.
  • Less favorable asset division. As we mentioned, the victim may receive a greater share of the overall property split. For instance, if Spouse A used $20,000 of marital funds and assets to sustain their addiction, Spouse B might ask the court to consider awarding Spouse B with at least $20,000 worth of marital assets that are subject to division.

Proving Wasteful Dissipation of Assets

If you suspect your spouse is guilty of marital waste, you will need evidence to substantiate your claim. More specifically, you will need evidence that proves:

  • When the wasteful dissipation occurred. Changes in their spending habits or shared accounts close to or during the divorce is a red flag. While your spouse may have been a frivolous spender during your marriage, their spending during your marriage isn’t wasteful dissipation. However, if their spending or use of your marital assets changed/increased during your separation or divorce, you should be concerned about asset dissipation.
  • Where the money or assets went. To prove asset dissipation occurred, you should show that the money was used for the sole benefit of the guilty party or the guilty party intended the funds or assets to be for themselves.
  • Whether the non-liable spouse agreed with or consented to the spending. You will also need to showcase that you did not agree with or consent to the use of the marital funds in this case. For instance, you can show that your spouse attempted to hide their activities.

Getting Divorced? Contact Our Firm Today!

At Rubenfeld Law Firm, our attorney has over 30 years of legal experience. Known for providing cost-effective and personalized solutions, our firm is prepared and equipped to help you navigate your divorce case. If you are worried your other spouse has wasted marital assets or will accuse you of marital waste, we can help you build a solid case strategy to prove or disprove such claims.

You don’t have to navigate the divorce process alone. Schedule a case consultation today by calling (631) 777-7200.