Dissipation of Marital Assets

One of the more difficult problems in any divorce is making sure that both parties get their fair share of the marital assets. Minnesota is an equitable distribution state, which means that the court will make an equitable distribution of the marital assets at the conclusion of the divorce. Divorce parties should note that equitable does not necessarily mean equal, and neither party is “entitled” to an exactly equal share. This is especially true when one party has intentionally dissipated marital assets.

 money on fire

Minnesota courts have defined dissipation of marital assets as “wasting or expending funds foolishly.”  Dissipation may be found where one spouse is spending wildly and frivolously leading up to the divorce in an intentional attempt to reduce the amount of assets that exist to be divided. For example, if one spouse decides to use marital funds to take a lavish vacation to Las Vegas with his or her new partner, this could be found by a court to be dissipation of marital assets. Another way dissipation can occur is if one spouse is artificially trying to raise the parties “standard of living.”  In those types of cases, the wrong-doing spouse may be planning on requesting spousal maintenance, and so wants to create the appearance of a better standard of living in order to bolster their support request.

In short, dissipation needs to be wasteful, unusual, and frivolous. Large expenditures will not be necessarily found to be dissipation by a court. Spending money to retain a divorce lawyer, bail a marital residence out of foreclosure, or pay off a marital debt will all be examples of large expenditures that a court will likely find to be necessary and not a waste of assets. A spouse seeking to prove that his or her spouse is intentionally dissipating assets needs to demonstrate that the wrong-doing spouse is not spending money in a manner that is consistent with the habits the parties maintained during the marriage. If a spouse is successful in demonstrating that the other spouse has intentionally dissipated assets, the court is free to reduce the wrong-doing spouse’s share of the remaining assets by the amount that he or she frivolously spent, in order to balance the scales and make the division fair and equitable.

We have extensive experience helping our clients with all types of property division issues. Call us today at (651) 371-9117 for an appointment to talk about your divorce.