Dissipation of assets refers to frivolous or wasteful spending of marital property during divorce proceedings, often done out of spite or to prevent the other spouse from getting an equitable share. Sometimes, a divorcing spouse will rack up joint credit card debt on extravagant vacations or lavish their new paramour with expensive gifts. They may give away valuable items or sell them only to drink or gamble the money away.
This behavior happens most often in cases where one spouse has a much higher income than the other. The higher-earning spouse knows they can always make more money, so they would rather spend everything they have than see it go to their former spouse. This has major consequences for a spouse that sacrificed a career to take care of the home, or is otherwise unable to financially rebound so quickly after divorce. The lower-earning spouse is usually reliant on an equitable division of assets to start a new life. Fortunately, there are steps one can take to mitigate the damage incurred by a spouse’s dissipation of marital assets.
Recognizing Dissipation of Assets in Your Divorce Case
Talk to your attorney if you notice your spouse has developed any strange new spending habits. However, not every credit card charge you disapprove of will qualify as dissipation of assets. To be considered dissipation of assets, the spending must be:
- Sudden. If your spouse has always been reckless with money or spends way too much on frivolous entertainment, continuing these habits after separation does not reflect a dissipation of assets.
- Frivolous. You must be able to demonstrate the spending is a waste of marital assets.
- Substantial. There is no specific dollar amount that must be spent before it is considered dissipation. However, the spending must be extraordinary relative to the assets the couple owns. Taking a new girlfriend out to dinner probably won’t cut it, but buying her a new car might.
What to Do About Marital Dissipation of Assets
Most states will issue an automatic temporary restraining order (ATRO) at the outset of a divorce, requiring both spouses to maintain the financial status quo during the divorce proceedings. However, these orders are not automatically issued in South Carolina. If you and your attorney believe there has been a dissipation of assets, you can ask the Court to issue an emergency ex parte order to prevent further wasteful spending. To offset the damage that has already been done, the judge will usually adjust the division of assets in the non-offending spouse’s favor. For example, if one spouse was found to have dissipated $40,000 of marital assets, the judge may increase the other spouse’s share by the same amount.
Talk to a South Carolina Divorce Attorney
If you are concerned about your soon-to-be ex-spouse’s mismanagement of marital property, an experienced family law attorney may be able to help. Contact the knowledgeable and dedicated divorce lawyers at McCoy & Stokes, LLC in Charleston, South Carolina today.