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What does the dissipation of assets mean?

On Behalf of | Sep 20, 2023 | Divorce And Child Custody

Spouses can get up to all sorts of tricks in a divorce, including a few related to money. One is known as the dissipation of assets.

It means one person sets out to squander, or waste marital assets. Why might they do this?

To avoid having to share

Let’s say the husband was the main breadwinner in this relationship. Even though his wife raised the kids, kept the house and so much more, the husband still believes he was the one doing the hard work – going out every day and bringing back money.

Now that his wife has filed for divorce he is upset about having to split assets. He might feel that they are more his than hers as he is the one who earned the money. So he sets out to reduce what he needs to share, taking his friends out for extravagant lunches and paying for it all. Or buying himself a fancy new suit that costs thousands along with a host of other nice clothes he knows his wife would tell him they cannot afford. Or perhaps buying an expensive necklace for the new girlfriend he has secretly been seeing.

His attitude is pretty much, better spend it now otherwise she is going to take a large chunk of it. 

To inconvenience or punish the other party

Another motivation might be to try and make the other person’s life difficult. The working husband knows they can soon earn enough to get back on their feet once the divorce is over, but their wife will have much more difficulty doing so. By spending down the assets, he knows she will struggle to lead a decent life because whatever share the court awards her, it won’t amount to much and it will take her years to reach a decent level of earning power.

It’s not just husbands who can squander assets, of course, wives can do it too and it can happen even when both parties are working but a power imbalance certainly makes it easier.

Learning more about how to protect your finances in a divorce is crucial if you suspect your spouse is dissipating assets.