What is Dissipation of Assets in a California Divorce?

As an Orange County divorce firm located in Newport Beach, California, we’re the first to say there is a lot of wealth in South Orange County. Because of this, our clients are no stranger to wasteful dissipation of marital assets or “dissipation of assets” in their divorces.

Some divorcing couples in Orange County manage to have collaborative divorces; they stay out of court and walk away with a satisfactory divorce settlement. But for other couples, unfortunately, their divorces are a lot more complex. We’re talking about the divorces that are fueled by anger, jealousy, spite, revenge, or all the above.

Resorting to Dishonesty

We’ve seen and heard every trick in the book. We’ve seen husbands and wives go great lengths to keep their spouses from receiving their fair share of the marital estate. One of the most common tricks is to dissipate or “waste” the couple’s marital assets. When a spouse is dissipating marital assets, they intentionally squander marital assets to prevent their husband or wife from getting what they are entitled to in the divorce settlement.

“How does a spouse do that?” Well, a husband can dissipate assets by buying a girlfriend a breast augmentation or paying for her apartment on PCH. A wife with access to the couple’s bank accounts could hand her boyfriend cash to invest in his tech startup. Often, a spiteful spouse, especially a breadwinner, will have no problem throwing money away at the casino or on friends or family because they plan on earning it back after they’re single again.

Often, a vindictive spouse would rather throw money around than have to split it with their soon-to-be-ex. But if their spouse is a stay-at-home mother or a homemaker, the consequences can be dire.

If a wife left the workforce to care for the children, she may earn very little when she first returns to work. So, what’s a minor hiccup for a wealthy husband can mean the stay-at-home mom loses her livelihood. California offers a degree of protection once a spouse files a divorce by requiring an Automatic Temporary Restraining Order (ATRO), which prevents both spouses from changing their financial status after a divorce action is filed.

If you’re concerned your spouse has been dissipating assets, it may be wise to hire a forensic accountant. If it can be proven to the court that your spouse has wasted marital assets; for example, on a paramour, it could impact the divorce settlement.

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