How Does Squandered Money Affect a Divorce Ruling?

To “squander” means to “waste in a reckless and foolish manner,” according to the Oxford dictionary. Often in a divorce, we see resources dried up by one party, leaving the other with little leftover. This may be the reason for the divorce in the first place. In California, this kind of overspending can cause real problems.

California operates under a “community property” division model. Put simply, everything that is acquired during the marriage is shared equally by both spouses. These are “marital assets.” Only inheritance and gifts from people outside the marriage are excluded. When a couple divorces, the state attempts to give each partner an equal 50% of the marital assets.

This equal sharing of assets includes any debt incurred during the marriage. Knowing this, a question arises: What happens when one of the two spouses spent all the money? Does the other inherit half of this debt?

To answer this question, you must learn about the concept of “wasteful dissipation.”

What Is Wasteful Dissipation?

There is an old legal adage that goes, “Criminal law is bad people on their best behavior, and family law is good people on their worst behavior.” To be fair, the saying is an overgeneralization, but it is born from genuine observation and experience. People can go to extremes in a divorce. Bitterness, resentment, and plain old vengeance can motivate some truly ugly behavior.

One such tactic is wasteful dissipation. This is the practice of intentionally wasting as much money as possible before a divorce, leaving little leftover to divide among spouses. There are plenty of reasons a spouse would do this. Some do it simply out of spite. They’re angry about the divorce, and they don’t want their spouse to have anything afterward. Others may use it as a tactic to hide money. They empty accounts, give the money to a trusted friend, and hope to get it back after the divorce is finalized.

Whatever the reason, doing this is a bad idea. It’s easy for the other side to pull up financial records, proving the behavior. If you have a track record of frugal spending for years, then suddenly buy two sports cars a few months before the divorce, it’s easy to see what’s really happening.

Wasteful Dissipation During a Marriage

At its core, a wasteful dissipation accusation helps keep people from hurting one another right before a divorce. What if, however, one party spent all the money throughout the marriage?

Claiming wasteful dissipation in this situation is much trickier. A married couple is a family, and the law assumes that each spouse is involved in the other’s life. In theory, you should be an active participant in the home’s finances. Imagine your spouse is simply bad with money and often comes home with new, expensive gadgets they never use. You may not like this, and it may be why you’re divorcing. This behavior, however, doesn’t really qualify as wasteful dissipation. You were aware of the behavior, and it was a part of the marriage.

To prove wasteful dissipation during a marriage, show that the spending wasn’t a part of the marriage. The money was spent foolishly. A common example is a spouse with a gambling problem. This behavior is often done in secret, and the losses are hidden from the spouse. Another example would be a spouse spending money on an extramarital affair.

It also helps to prove that the spending was hidden from you. Discovering the spending was a surprise, and it was not tolerated. If you were aware of the spending and did nothing to stop it, the court may consider you an active participant. If so, it has no reason to rule that your partner is guilty of wasteful dissipation.

It also helps to show that this spending started as the marriage began going wrong. If there was a sudden turn in your spouse’s general spending habits, that change can help support your claim. It shows the court that you were not a willing, tolerant participant.

To repeat, proving wasteful dissipation throughout the marriage is not easy. Even the suggestions above are strategies that can help support your claim, but they are not foolproof. The court could easily go either way, backing up your claim or ignoring it.

How You Can Benefit from a Wasteful Dissipation Claim

If you can prove that your spouse is guilty of wasteful dissipation, you may be entitled to a greater split of the leftover property. You may also be allowed to take on less of the overall marital debt. In a way, this still counts as an equal, 50/50 split. Your spouse, guilty of dissipation, is giving you assets equal to the amount of money they squandered.

If you believe your spouse is guilty of wasteful dissipation, contact our firm for a consultation. We can review the facts of your case and may be able to help build a strong argument in court. You can reach us online or at (949) 565-4158.