What Is Dissipation of Property?

Dissipation of property during a marriage can be a hotly
contested issue in a divorce action. Often, one party
feels that a portion of his or her property has been
exhausted for no good reason. Dissipation arises when
property is improperly used for the sole benefit of one
spouse, for a purpose unrelated to the marriage, at a time
when the marriage is undergoing an irreconcilable
breakdown. Once a prima facie case of dissipation is
made, the party charged with dissipation must establish by
clear and convincing evidence how the funds were spent.
Once it is established that one party has liquidated
marital assets, the party charged with dissipation must
establish by clear and specific evidence how the funds were
spent.

What specific acts constitute dissipation? Generally,
expenditures held to constitute dissipation are
extraordinary expenses that clearly do not further common
marital interests. For example, gambling losses are
patently dissipation. The payment of legal fees from
marital assets has been considered dissipation. However,
less than extraordinary expenses have been found to
constitute dissipation. For instance, living expenses of
one party after the marriage's irreconcilable breakdown
were held in one case to constitute dissipation. "The
expenditure of marital funds by one spouse for necessary,
appropriate and legitimate living expenses at a time the
marriage is undergoing an irreconcilable breakdown will not
be considered to be dissipation.

Dissipation is not limited to financial issues. Wife's
destruction of family photographs constituted dissipation.
Dissipation can also consist of failing to maintain
property. A spouse's failure to make mortgage payments and
prevent foreclosure in a family home, which results in loss
of equity therein, can constitute dissipation. Failing to
pay income tax liability, resulting in interest and
penalties, constitutes dissipation.

Dissipation should be confined to the situation where value
is lost to the marital or non-marital estate resulting in
the sole benefit to one spouse for a purpose unrelated to
the marriage during marriage breakdown. The timing of the
alleged dissipation is an important consideration.
Determining the instant when the marriage becomes
irrevocably broken down can be difficult. The court may
charge a spouse who dissipated assets the amount dissipated
against his or her share of marital property in order to
compensate the other party, but an award of cash or
property equal to half of the amount dissipated is not
mandated.

It is always best for parties to maintain the status quo as
to spending and selling while dissolving their marriage.
If this is done, neither party will be able to make a claim
for dissipation. Further, the overall settlement
resolution process will be easier to traverse. When one
party believes that he or she is being taken advantage of,
the divorce process often stalls. It is wise to consult
with an experienced divorce or family law attorney prior to
excessive spending or unnecessary liquidation of marital
property.

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David M. Siegel is an attorney practicing divorce and
family law. Additional information is available at
http://www.divorce-lawyers-newyork.com .