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Could you be the victim of ‘dissipation of assets?’

Most people have heard about wealthy spouses going to great lengths to hide assets from their soon-to-be-ex to avoid having to share them. That’s why people involved in high-asset divorces sometimes hire forensic accountants to ferret out bank accounts, property and other items of value that a spouse may be trying to shield from property division.

However, there’s another all-too-common phenomenon called “dissipation of assets” that many people have never heard of until they become victims themselves. This is when a spouse squanders marital assets simply to avoid having to split them.

Usually those who do this are the wealthier of the two in the couple and people who have high incomes that will help them replenish their wealth once the divorce is over and the assets have been divided.

It’s essential to understand what dissipation of assets is and isn’t. If your spouse buys an expensive new watch, that in and of itself isn’t dissipation. Remember, too, that if you’re no longer living together, you’ll both likely be spending additional money for living expenses.

However, if he or she suddenly starts taking vacations abroad, buys an expensive car or starts making extravagant purchases (often for a new romantic partner), then you may have cause to take action.

Assuming that your spouse is smart enough to keep evidence of his or her splurging off of Facebook and Instagram and not drive a new Lamborghini to your lawyer’s office for a meeting, you may have to do a bit of work. That means looking at your joint credit cards and bank accounts for any large or unusual expenditures or spending patterns that are out of the ordinary. Be particularly aware of company names you’ve never heard of and look them up.

Share your concerns and any evidence you have with your attorney. You may be able to take legal action. Washington, like a number of other states, has something called a Automatic Temporary Order. This can be used, among other things, to prevent either or both spouses from making significant non-essential purchases using marital assets.

It doesn’t take long to blow through a fortune, and people who are secure that they will be able to recoup the money quickly have been known to do it out of anger and revenge. That’s why it’s essential to start keeping an eye on things and inform your attorney as soon as possible.

Source: Think Financially, Not Emotionally, “What Is Dissipation Of Assets In Divorce And What, If Anything, Can You Do About It?,” Jeffrey A. Landers, accessed April 07, 2017