What Is Wasteful Dissipation, and How Can It Affect My Divorce?
Wasteful dissipation, also known as marital waste or dissipation of assets, can result in financial penalties and leave you or your spouse worse off after the divorce. Read on to learn what types of spending may qualify as wasteful dissipation so that you can protect your assets.
What Qualifies as Wasteful Dissipation?
Virginia courts will likely establish wasteful dissipation when a spouse:
- Deliberately spends, conceals, destroys, or disposes of marital property;
- In anticipation of divorce or separation;
- For a purpose unconnected to the marriage; and
- To deprive the other spouse of their share of marital assets.
Note that this only relates to marital as opposed to separate property. The behavior must also occur in anticipation of divorce or separation, so frivolous or selfish spending habits — even as egregious as buying recreational drugs — when the marriage hadn’t begun to deteriorate don’t qualify.
To prove wasteful dissipation, you must only show that your spouse withdrew or used marital funds. Your spouse must then show that they spent the funds on a legitimate purpose.
Both you and your spouse will likely need to produce all financial statements and other documentation during the discovery process. If your spouse isn’t forthcoming in discovery, you may subpoena the bank or other financial institution for the missing documents.
To maximize the available evidence, start collecting copies of every financial record you can access as soon as you know that you are separating. Receipts for unnecessary or unduly expensive items can be proof, as can testimony from relatives and friends as to your spouse’s motives.
Allowed Expenses in Anticipation of Divorce or Separation
Not all spending and use of marital property that solely benefit one spouse constitute marital waste. Under Virginia law, spending in anticipation of divorce or separation is allowed for:
- Reasonable living expenses
- Attorney fees
- Court filing fees
- Other legal fees, such as paying for expert witnesses
- Spousal support
- Children’s tuition
What Happens When the Court Finds Wasteful Dissipation?
If you and your spouse are unable to settle your case through negotiations, you will have an equitable distribution hearing in court. In Virginia, the default position for dividing marital assets is equitable distribution. Equitable doesn’t mean equal or 50/50. It means fair and reasonable.
During an equitable distribution hearing, the court will consider multiple factors — including marital waste allegations — to determine what would be an equitable division in the circumstances.
If the court finds that wasteful dissipation occurred, then it may grant the aggrieved spouse a financial award. This usually amounts to using an earlier valuation date of the dissipated asset before the marital waste lowered its value.
Do You Suspect Wasteful Dissipation? Talk to a Virginia Divorce Attorney Today.
If you believe your spouse is engaging in wasteful dissipation, you need to act fast. Otherwise, you may fail to protect your assets and financial interests. Call our team at DiPietro Law Group, PLLC, at (888) 530-4374 today to speak to an experienced divorce lawyer in Virginia.