Can a Wife's Financial Misconduct Be Considered in a Divorce?

by Heather Frances J.D. Google
If a wife squandered great sums of money on an extramarital affair, the court may decide that her spending was a dissipation of assets.

If a wife squandered great sums of money on an extramarital affair, the court may decide that her spending was a dissipation of assets.

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Your divorce court will issue a divorce decree that details the terms of your divorce, including how property is to be divided between you and your spouse. Depending on your state’s laws, the court may be able to consider your spouse’s misuse of money, among other factors, when it divides your marital property.

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Dissipation of Assets

In a divorce situation, a spouse’s misuse of money is usually called “dissipation of assets.” Though the exact definition varies between states, dissipation is generally characterized by wasteful or foolish spending in a manner that did not benefit the family. Typically, courts recognize that more marital assets would be available for distribution if one spouse had not wasted those assets during the marriage. Additionally, if a spouse intentionally spends money so that there will be less available for division in the divorce, the court may decide that such spending was a dissipation of assets.

Examples

Sloppiness with money is not enough for you to successfully claim that your spouse has dissipated marital assets, since dissipation usually requires significant monetary waste. Also, money spent to benefit the family usually is not considered wasteful. For example, a court is unlikely to find dissipation if your spouse ran up $10,000 in credit card debt by purchasing groceries or clothes for the kids. However, if the money was spent on an extramarital affair or lost through a gambling addiction, the court is much more likely to say that the money was squandered.

Burden of Proof

If you claim your spouse dissipated marital assets, you typically have the burden of proving to the court that wrongful dissipation occurred. Your evidence could include receipts or testimony indicating the amount of dissipation and where the money went. Even if you can prove the money was spent, your spouse may have defenses, including that you consented to the expenditures, that the expenditures were made for family purposes or that her spending was simply bad luck or bad judgment.

Repairing the Damage

Your state’s laws determine how your divorce court can repair the damage caused by your spouse’s dissipation of marital assets. Generally, courts may reduce the amount of money or property awarded to the wasteful spouse in a divorce as a way to compensate the innocent spouse for the wasted funds. However, courts don’t have to provide a dollar-for-dollar adjustment and may have authority to customize an equitable award based on the facts of the case. For example, if your spouse still has the money she took from the family checking account, the court can order her to return it so that it can be divided.