Very often couples disagree about their finances, particularly when it comes to how their money is spent. It is also common for one spouse to have total control over the finances during the marriage. What happens if during the divorce, it is discovered that one spouse misused or wasted marital assets by using marital funds on extramarital affairs, supporting an extended family member, engaging in excessive gambling, or making reckless business decisions. In family law, this is referred to as “dissipation”.
In general, dissipation of marital assets may be found where a spouse uses marital property for his or her own benefit and for a purpose unrelated to the marriage. To determine whether a spouse has dissipated assets, a court will consider several factors: (1) the proximity of the expenditure to the parties' separation, (2) whether the expenditure was typical of expenditures made by the parties prior to the breakdown of the marriage, (3) whether the expenditure benefitted the “joint” marital enterprise or was for the benefit of one spouse to the exclusion of the other, and (4) the need for, and amount of, the expenditure. Ultimately, the court will weigh the factors to determine whether the assets were expended by one spouse with the intent of diminishing the other spouse's share of the marital estate. Kothari v. Kothari, 255 N.J. Super. 500 (App. Div. 1992).
The concept of dissipation is relevant for purposes of dividing assets and liabilities in connection with a divorce. If you have questions regarding dissipation or the division of marital property, contact the experienced family law attorneys at Cohn Lifland Pearlman Herrmann & Knopf, LLP. We can help you understand your rights and obligations.