Getting divorced can bring out the worst in people. In the knowledge that the marriage is ending, a spouse might decide to go on a spending spree, burning through marital assets before they can be divided. If this is found by the court to be purposeful dissipation, it will negatively impact the spender’s share of assets during equitable distribution.

New Jersey divorce courts conduct case-specific inquiries to decide whether a spouse’s spending qualifies as dissipation of marital assets. A judge will analyze these three factors:

  • When did the expenditure occur relative to the couple’s separation or divorce filing?
  • Was the expenditure similar to the kinds of expenditures the parties made while married?
  • Did the expenditure benefit both spouses or just one?

As a New Jersey appeals court explained in a precedential ruling, “The question ultimately to be answered by weighing these considerations is whether the assets were expended by one spouse with the intent of diminishing the other spouse’s share of the marital estate.”

There are countless ways in which a spouse might wastefully spend or transfer marital assets to prevent their spouse from receiving a fair share. Some of the more common ones are these:

  • Running up credit card debt
  • Buying a car with financing and hoping the other spouse will have to pay half the loan
  • Selling family property or business interests below market value right before divorce
  • Wiring money to friends or relatives prior to divorce
  • Signing assets over to other people to remove the assets from the marital estate

If you suspect your spouse is dissipating assets, you should notify your lawyer right away. New Jersey allows a spouse to ask the court for a temporary restraining order (TRO) that applies specifically to marital assets. The TRO doesn’t completely freeze accounts. Both spouses are still allowed to pay bills and make routine purchases. But it does give financial institutions notice to be on the lookout for unusual expenses.

During the equitable distribution process, the court can consider multiple factors in dividing marital assets fairly, though not necessarily equally, between the spouses. When a court decides that asset dissipation occurred, there are different options it can use to compensate the non-spending spouse. These may include:

  • Making the spending spouse pay more spousal support
  • Awarding a larger portion of the marital property to the non-spending spouse
  • Assigning more of the marital debt to the spending spouse

Even though equitable distribution applies only to marital assets, the court in justifiable circumstances can look to the spending spouse’s separate property to compensate the other spouse for their losses.

At the Martone Law Group, LLC in Haddon Heights, New Jersey, I help clients in Camden and Burlington counties who are getting divorced and facing issues related to division of assets. Please call my office at 856-432-4587 or contact me online to arrange a free initial consultation.