Divorce With Respect

Marital waste: When spending is more than just a shopping spree

On Behalf of | Nov 15, 2017 | Division Of Assets, English, Firm News | 0 comments

If your marriage is ending and you’re splitting on bad terms, you may be worried that your ex will become spiteful or resentful and act on these actions. This isn’t uncommon in bitter contested divorce; but what is a problem, is if that resentment results in anger-driven decisions to hurt you, specifically in a financial way.

Consider for a moment your bank accounts and the fact that during divorce proceedings, you and you’re your ex will need to divide your assets. Since California is a community property state, all of the assets you acquired during your marriage will be separated equally. If your spouse is bitter, however, he or she may want to minimize what you receive in the divorce settlement, perhaps doing so by going on large spending sprees or racking up copious amounts of debts.

But is this legal and is there anything you can do before or after the fact? Once a divorce proceeding starts in California each party is under a restraining order not to buy or sell assets or incur any debt without the consent of the other party or permission of the court. The main exception is this is for ordinary expenses.

What is marital waste?

Marital waste occurs when one party of a divorcing couple begins to excessively spend money, damage property or sell belongings in hopes of depriving their spouse of those assets. This is also sometimes called dissipation of marital assets. Spouses do have a fiduciary duty to each other.

What is considered wasteful?

Marital waste occurs when funds are used in a foolish manner, meaning a single shopping trip might not raise any red flags while multiple big-ticket purchases could. In some cases, the excessive spending starts when the marriage begins to break down. Typically, the funds are also used for purposes unrelated to the marriage.

Common examples include:

  • Gambling
  • Partying and spending money on alcohol or drugs
  • Spending money on an affair
  • Selling off property or business expenses hastily or under value
  • Repeated credit card use for non-essential items
  • Gifting large sums of money to friends or family

What can you do?

If your spouse has always lived lavishly and spent funds eating at fancy restaurants or excessive shopping, then it may be difficult to identify marital waste from normal expenditures. However, if you suspect marital waste, the courts can get involved.

In California, you and your spouse have to provide a complete list of all of your assets and debts. This information includes all recent purchases. Specifically, both parties can be required to show all credit card bills and expenditures. If you notice a remarkable increase in spending after you file for divorce or that items are missing from the schedule of assets and debts, you may have a case for marital waste. This financial disclosure is signed under penalty of perjury.

If a forensic accountant can confirm that marital waste has occurred, the courts may award you a settlement that accounts for your spouse’s spending.