Featured Article - Dissipation of Assets

Dissipation of property during a marriage can be a hotly contested issue in a divorce action. Often, one party feels that a portion of his or her property has been exhausted for no good reason. Dissipation arises when property is improperly used for the sole benefit of one spouse, for a purpose unrelated to the marriage, at a time when the marriage is undergoing an irreconcilable breakdown. Once a prima facie case of dissipation is made, the party charged with dissipation must establish by clear and convincing evidence how the funds were spent. Once it is established that one party has liquidated marital assets, the party charged with dissipation must establish by clear and specific evidence how the funds were spent.

What specific acts constitute dissipation? Generally, expenditures held to constitute dissipation are extraordinary expenses that clearly do not further common marital interests. For example, gambling losses are patently dissipation. The payment of legal fees from marital assets has been considered dissipation. However, less than extraordinary expenses have been found to constitute dissipation. For instance, living expenses of one party after the marriage's irreconcilable breakdown were held in one case to constitute dissipation. "The expenditure of marital funds by one spouse for necessary, appropriate and legitimate living expenses at a time the marriage is undergoing an irreconcilable breakdown will not be considered to be dissipation.

Dissipation is not limited to financial issues. Wife's destruction of family photographs constituted dissipation. Dissipation can also consist of failing to maintain property. A spouse's failure to make mortgage payments and prevent foreclosure in a family home, which results in loss of equity therein, can constitute dissipation. Failing to pay income tax liability, resulting in interest and penalties, constitutes dissipation.

Dissipation should be confined to the situation where value is lost to the marital or non-marital estate resulting in the sole benefit to one spouse for a purpose unrelated to the marriage during marriage breakdown. The timing of the alleged dissipation is an important consideration. Determining the instant when the marriage becomes irrevocably broken down can be difficult. The court may charge a spouse who dissipated assets the amount dissipated against his or her share of marital property in order to compensate the other party, but an award of cash or property equal to half of the amount dissipated is not mandated.

It is always best for parties to maintain the status quo as to spending and selling while dissolving their marriage. If this is done, neither party will be able to make a claim for dissipation. Further, the overall settlement resolution process will be easier to traverse. When one party believes that he or she is being taken advantage of, the divorce process often stalls. It is wise to consult with an experienced divorce or family law attorney prior to excessive spending or unnecessary liquidation of marital property.

David M. Siegel is an attorney practicing divorce and family law. Additional information is available at http://www.divorce-lawyers-newyork.com .

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