Divorcing spouses generally need to split their property and debts. That process is often the most contentious element of divorce.
People may find themselves fighting over assets with emotional value and resources that represent significant investment, such as real property and retirement savings accounts. In some cases, one spouse may have gone on a ridiculous spending spree before they file for divorce.
What rights do people have when they recognize unusual changes in their spouse’s financial behavior immediately before a divorce?
Dissipation can affect property division terms
For the most part, the courts do not consider marital misconduct when dividing marital property. Instead, they focus on fairness given the length of the marriage, the health of the spouses, and other unique factors.
The only time that the courts generally considered misconduct is when it arises as part of the divorce process. Wasteful spending that occurs immediately before or after a divorce filing can raise red flags.
If there are financial records that clearly show what the spouses usually spend and receipts from shopping excursions that demonstrate unusual behavior, the courts may take that into consideration. One spouse completely replacing their wardrobe two weeks before they file for divorce could prompt the courts to adjust the property division settlement.
The courts may consider the amount of debt taken on due to unusual and unnecessary spending when splitting up the marital estate. The waste of liquid resources in the form of marital income could also influence the final property division settlements.
The more egregious the difference between normal spending and pre-divorce spending is, the easier it may be to convince the courts that dissipation has occurred. Spouses who understand the nuances of equitable distribution rules can push for a fair outcome during the property division process.