Many people learn all sorts of new terms during their divorce -- often through unpleasant experiences. One of these new terms is "dissipation of assets." It occurs when one spouse (generally the one in a better financial position) squanders marital assets in order to avoid having to divide them with his or her spouse.
Spouses who have large salaries or other sources of income figure that they can make the money back after the divorce when they no longer have to share it. In the meantime, often out of spite, they get rid of it.
Dissipation of assets isn't the same thing as hiding them (although that can be a problem as well). It often involves making lavish purchases for a romantic partner, gambling the money or taking extravagant trips.
How to Tell if Your Spouse Is Dissipating Assets
Keep an eye on your joint bank accounts and credit cards. If you see large withdrawals or charges, find out what they are. If you don't recognize a company name, check it out. You may want to hire a forensic accountant. These professionals not only find hidden assets, but know how to spot questionable transactions that are familiar when someone is dissipating assets prior to divorce.
To make a claim that your spouse is dissipating your assets, you need to show that his or her spending has become considerably frivolous and unusual. It involves more than a few extra purchases here or there -- particularly if your spouse has never been frugal. Considerable amounts of money spent on jewelry, travel or other luxuries (assuming that you're not the recipient) may give you cause to prove that your spouse is consciously blowing through your assets so that there's less to divide up.
What Can You Do to Prevent or Stop Asset Dissipation?
Some states require an Automatic Temporary Restraining Order for some divorces. An ATRO prevents either spouse from making significant financial changes that impact marital assets. If an ATRO isn't mandatory, your attorney can request one if he or she believes that there's enough evidence to provide a convincing claim of dissipation of assets.
The sooner this is done, the better. It doesn't take long for someone to spend thousands of dollars that you'll never see again. It's always wise as soon as you begin to contemplate divorce, or believe that your spouse is, to start watching your legal rights and take whatever legal steps your attorney advises to protect them.
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