What is the “dissipation of assets” in a divorce?

When spouses are divorcing, they sometimes do things just out of spite or to “get back” at each other. Sometimes, the people who do this are otherwise decent and reasonable people who are overwhelmed by what is happening.

One way that some spouses take revenge on their future exes is something called “dissipation of assets.” This is when one spouse (typically the one with a higher income and/or more individual wealth) squanders marital assets to lessen the amount their spouse will get when they start dividing them.

How are assets typically dissipated?

There’s no shortage of ways to spend money if your goal is simply to keep someone else from getting it. Some people who have already moved on to another relationship will spend it on their new partner. Sometimes they’ll make expensive purchases for themselves or spend thousands of dollars on travel. If they have an addiction, like drugs or gambling, it can easily go to that.

How do you spot this activity?

It’s always wise to keep an eye on your joint bank accounts and other assets as you’re preparing to divorce and throughout the process. Watch all of your joint credit cards for charges you don’t recognize. Follow trading activity on your investment accounts.

What can you do to stop it?

To claim that your spouse is dissipating assets, you need to show that their spending habits have changed significantly and that they’re spending large amounts of money on luxuries and other non-essentials. Buying furniture for their new apartment probably wouldn’t count. However, buying a half-dozen Rolexes for themselves and friends likely would.

If you’ve even begun contemplating divorce, the sooner you begin protecting your assets, the better off you’ll be. Seeking experienced legal guidance as soon as possible is always a wise move.


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