What to Do if Your Spouse Is Spending Excessively Ahead of Your Divorce

Divorce can bring out the worst in people. Faced with the reality that the marriage is ending, one spouse might decide to spend large amounts of marital funds either in the weeks leading up to the divorce or soon after the process begins. Spending down the marital estate comes up frequently in New York divorces. It is so common that it has a name: wasteful dissipation of assets. Whether your spouse does it out of hurt, spite or a sense of entitlement, you need to bring such actions to your lawyer’s attention as soon as possible.

Wasteful dissipation occurs when one spouse spends or transfers marital assets in an irresponsible or unjustified manner prior to or during divorce in order to prevent the other spouse from obtaining their fair share during the equitable distribution process. Common examples of wasteful dissipation are:

• Running up excessive credit card debt
• Gambling
• Selling family property or business interests at far less than fair market value
• Spending on extramarital affairs
• Transferring assets to family or friends to remove the assets from the marital estate

If you suspect your spouse is dissipating assets, you must notify your lawyer immediately. If you wait until your divorce at or near finalization, it could be too late to fully protect your right of equitable distribution.

New York courts are strongly against asset dissipation and, if it is brought to their attention in time, judges can impose penalties on spouses who engage in this conduct. Specifically, the court can factor the dissipated (or hidden) assets into the final property division determination.

Suppose, for example, that your spouse sold a piece of property worth $200,000 and then made sure the money was out of reach of the family court, either by spending it or by transferring it to a third party. In this situation, the court could reduce your spouse’s share of the remaining marital assets by $200,000.

To prove that your spouse wastefully dissipated an asset, your lawyer will need establish that all of these are true:

• The asset was lost or transferred after the marriage broke down
• The asset cannot be returned to the marital estate
• The offending spouse had control over the asset at the time that it was lost or transferred
• The loss or transfer had no legitimate purpose within the marriage or divorce. For example, selling an asset to pay for the costs of the divorce would probably not be considered wasteful dissipation.

Proving these elements requires thorough investigative work and takes time, which is another reason you should contact your lawyer as soon as you suspect your spouse is engaging in this behavior.

Bryan L. Salamone & Associates, P.C., has deep experience handling complex divorce and asset division matters. If your spouse is dissipating assets, or if you are being unfairly accused of wasteful dissipation, we can help. Call 1.631.479.3839 or contact us online to schedule a free initial consultation. We serve Nassau County, Suffolk County and all of Long Island.