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Dissipation of assets

by | Nov 2, 2016 | Divorce |

Strong emotions often characterize the end of a marriage. When couples in New Jersey divorce, there are situations in which one spouse may seek to discomfit the other one. This sometimes takes the form of actively working against fair and equitable property division.

In such a situation, there are different tricks that a spouse may use. One is dissipation of assets. Dissipation of assets occurs when a spouse begins to spend large amounts of money in a frivolous way. For example, a wife may begin spending large amounts of money on clothes and jewelry, using the couple’s joint credit card while aware that the debt will have to be divided upon divorce. Another example might be a husband who drains the couple’s bank accounts to spend money on travel.

While the courts generally take a dim view of dissipation, it can be difficult to prove. This is particularly true in marriages where both partners were used to spending freely. However, there are basic precautions that a spouse can take to guard against dissipation. The first is to review bank and credit card accounts regularly for unusual activity. The second is for a spouse to monitor credit reports to make sure that bills are being paid in a timely way and that no new accounts have been opened in hers or her name. Finally, in a high asset divorce, it may be advisable to hire a forensic accountant who can identify concealed assets and spending.

Individuals who are going through a divorce may benefit from speaking with an experienced family law attorney. The lawyer may be able to review the client’s case and make recommendations regarding divorce negotiations. These may include taking steps to address or prevent overspending of assets by the other spouse.

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