The dissipation of assets prior to divorce

The dissipation of assets prior to divorce

On Behalf of | Dec 23, 2022 | High-asset Divorce

One of the major financial issues that can come up during a high-asset divorce is when one of the spouses tries to hide those assets from the other. The court requires that both people give a full disclosure of the assets that they own jointly, so hiding these assets is illegal and deprives their spouse of their fair share. But it still does happen with a fair amount of frequency.

A related issue that you want to keep in mind, which usually gets much less attention, is the dissipation of assets. This is different than hiding assets, and it’s focused more on spending them. At the end of the day, though, the goal is the same. Your spouse may be spending those assets specifically so that you do not get them as the two of you go through property division.

Lack of balance in income

One reason that someone may do this is if they know that they earn a lot more money than you do. It is not nearly as problematic for them to earn back the money that they have spent. They know that they can spend it and enjoy the benefits of that spending, and then they can simply focus on saving again in the future. You, however, may not have the same earning ability, and so you have entirely lost those assets forever.

If your spouse is trying to do this, what you want to look for is an increased frequency in purchasing items that you cannot return to get a refund. Physical assets that are purchased – a new car, a television, etc – very clearly just become part of the asset division process on their own. But if your spouse buys a plane ticket for a vacation, for example, there’s no way to get any value back after they’ve already taken the vacation. They are the only one who benefits and the money has simply been wasted, from your perspective.

When this does happen, you need to know what legal steps to take to defend your right to the assets that you truly deserve. If this gets complicated, you need to know about all the options you have.