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How is the dissipation of assets different than hiding assets?

On Behalf of | Oct 5, 2023 | Divorce & Family Law |

Dividing assets can sometimes get complicated during a divorce. This is especially true when one spouse does not want to divide assets fairly. They may try to keep their ex from getting their fair share.

One way that people do this is by hiding assets, such as storing them in a secret bank account and not disclosing them. But there’s another tactic known as the dissipation of marital assets. How is this different?

Spending the assets down as far as possible

With the dissipation of marital assets, the goal isn’t to hide them. The person assumes that all of the assets they own at the time of the divorce will be known and divided.

As such, they decide that the best way to keep their ex from getting a portion of those assets is just to spend the money first. They may buy things like plane tickets, expensive meals, concert tickets and the like. They will buy things that provide experiences, meaning they can’t be refunded, but the money is gone. Someone who already started a new romantic relationship may spend the money on their new partner.

One reason that people do this is if they know that they are a much higher earner than their spouse. They know that reducing the total amount of assets they own as a couple can create a financial hardship for their ex when they divide the remaining assets, but they assume that they will have an easier time earning the money back after the divorce.

Dissipation of assets can be a form of fraud. If you’re going through a divorce and you think your spouse might do this, be sure you know what legal steps to take.