What Is Dissipation of Marital Assets?

Sometimes spouses fear that their spouse will spend, retitle, or move assets while a divorce is pending.  Others fear that their spouse will incur large debts.  There are two main ways that Connecticut courts can protect assets during a divorce.  The first attempts to preventing it from happening in the first place via automatic orders.  The second approach remedies it on the back end by taking it into account when the property is divided at the end of the divorce.  We referred to this as the “dissipation of marital assets.”

Read on to learn more.

Property Division and Dissipation of Assets

One of the factors Connecticut courts consider when distributing property between divorcing spouses is each spouse’s contribution to the acquisition, preservation or appreciation in the value of their respective estates.  As a result, a court may consider one spouse’s wasteful or inappropriate spending a dissipation of assets resulting in the other spouse receiving a credit in the final allocation of the marital estate.

Timeframe for Dissipation of Assets

In order for a court to consider a spouse’s action to be a dissipation of assets, it had to occur:

• When the spouse was contemplating divorce
• While the marriage was undergoing a breakdown
• During the divorce, if the spending was excessive and not in accordance with past habits

To prove dissipation, a spouse’s spending had to contrast with his or her typical pattern of spending.

What Courts Consider a Dissipation of Marital Assets

Not every large expenditure constitutes a dissipation of marital assets.  The test is whether an asset was actually wasted or misused.  Significantly, that means that the spouses’ disagreement about spending doesn’t mean it was a dissipation.  Courts also don’t consider a spouse’s poor investment decisions dissipation of assets. The court generally needs to see some form of financial misconduct with regard to spending unrelated to the marriage.  For example, gambling, spending on a girlfriend or boyfriend, hiding assets, or transferring assets to someone else without sufficient compensation.  The key point is that courts look at whether the

How Courts Address Dissipation of Assets

While a divorce is pending, the dissipation of assets likely also violate the automatic orders.  Frequently, we will ask for the spouse to return the asset or will file a Motion for Contempt of the Automatic Orders.

The Comprehensive Connecticut Property Division Guide

How to divide property is one of the most important issues in divorces.  And, it’s one of the most confusing. There are no set formulas or rules on how property will be divided.  The good news is that creates tremendous flexibility for experienced divorce attorneys to craft an individualized approach.  In order to prepare to make solid and informed decisions, you need to understand how property division works.  Our Comprehensive Connecticut Property Division Guide tells you everything you need to know about property division in Connecticut.

Next Steps

To start making a plan for your divorce, reach out.  Our first step at Freed Marcroft, the Goals & Planning Conference, is designed to get to the heart of your problem and unveil your true goals.  We analyze those goals, plus the facts of your case, and present you with recommendations and options to move forward.