In past blog posts, we’ve discussed the all-too-common issue of spouses hiding assets as they approach or go through divorce. People use all kinds of methods of keeping their spouse and legal representatives from finding or even knowing about money, property and other valuables that are subject to division.
Some spouses choose another tactic for keeping their soon-to-be ex from getting their fair share of joint assets. They spend them, give them away or just plain destroy them. This is commonly known as “dissipating” or “wasting” assets when it’s done for the purpose of keeping them from their spouse. This can also involve accruing debt that has to be repaid – potentially from marital assets.
How do spouses dissipate marital assets?
There are a number of ways in which a spouse can dissipate assets. These include:
- Giving marital assets to others
- Neglecting or destroying assets to decrease their value
- Running up credit card debt on personal luxuries, travel or gifts (often involving a new boyfriend or girlfriend)
- Making reckless investments or engaging in excessive gambling
Certainly, people going through a divorce have to continue to spend money on living expenses and even special occasion purchases. However, they should not be intentionally spending or risking large amounts of marital assets with the intention of having less to split.
Why are the remedies if a spouse is dissipating assets?
It’s critical for anyone who believes or has evidence that their spouse is dissipating marital assets to make the court aware of it as soon as possible. The longer they wait, the more money they can lose.
A judge can issue an injunction, freeze or limit the use of credit cards and accounts by one or even both spouses to limit the loss of assets as the divorce proceeds.
A judge can also use Michigan’s equitable distribution law to see that the non-dissipating spouse receives a larger settlement to make up for the losses. The law states that the judge may do so by “restoring to either party the whole, or such parts as it shall deem just and reasonable, of the real and personal estate that shall have come to either party by reason of the marriage , or for awarding to either party the value thereof, to be paid by either party in money.”
Getting experienced legal guidance even before the divorce process begins can help prevent or at least limit the risk of certain potentially consequential financial action taken by the one’s spouse, including hiding or dissipating assets. In this regard, seeking support promptly can help Michigan residents protect what is theirs.