Kevin and Kate separated after fifteen years of marriage.   Two months after their separation, Kevin took his girlfriend on an all expenses paid vacation to Hawaii. While there, he purchased several pieces of jewelry for her. When Kate learned of these expenditures she was furious and immediately contacted her attorney to see what action could be taken. 

Although the general rule is that property not in existence at the time of the divorce cannot be divided as marital property because it no longer exists, there is an exception to this rule.   When one spouse uses marital property for his or her own benefit for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown, and it is used with the intention of reducing funds available for division between the parties, dissipation may be found.

At trial, Kate must prove that Kevin used marital funds for other than a family purpose with the intention of reducing the funds available for equitable distribution.  The burden then shifts to Kevin who must show the expenditures were appropriate.  If he cannot prove that the funds used were for marital or family purposes the court may give Kate a monetary award to make things equitable. While there are exceptions to the rule, gifts to third parties especially when they are not the parties' children or close family members, is generally considered dissipation.  

Dissipation is not easy to prove.  Before spending a lot of time and money on the issue, Kate and her attorney should consider the likelihood of being able to meet their burden of showing that 1) funds were used and were not used for a family purpose and 2) the funds were used solely for the purpose of reducing the marital funds to be equitably divided.  Kate may want to start by reviewing credit card statements and bank account withdrawals to see what funds were used and where the funds were used.  Kate and her attorney may also want to consider whether it is worth the expense of retaining a forensic accountant to help identify missing or used assets but before incurring such an expense they should weigh and balance the likelihood of being able to prove that the funds were used solely to reduce the assets to be equitably divided.  If the funds were used for any other purpose, then no dissipation can be found.    

For more information read: What Is Dissipation Of Assets In Divorce And What, If Anything, Can You Do About It? By Jeff Landers, November 1, 2016 Forbes.com

January typically brings a surge in divorce filings as people decide to start the New Year with a clean slate. According to John Slowiaczek, President of the American Academy of Matrimonial Lawyers, a spike of 25% to 30% in divorce filings occurs every year in January. Why do people decide to file for divorce at the beginning of the year?  When a relationship is already tenuous, the holidays often bring tension, emotion, and financial burdens, which often trigger a spouse to file for divorce. If you are contemplating divorce, here are three things you should do now:

1.      Be strategic and gather information before rushing to file and escalating the situation.  Make copies of end of year statements, W-2’s, 1099’s and other relevant financial documents.   Have your team and a plan in place before moving forward.  Also, don't make any big financial decisions or changes immediately after the holidays if you are feeling tired or emotional.  

2.      Treat your divorce like you would a business deal. Starting with an aggressive approach can quickly increase the financial and emotional costs of your divorce.  Being respectful and thinking before you act will serve you well in the long run.

3.      Put together a team of professionals. A psychologist can help you make sure that you are thinking clearly; a certified financial planner can help you understand the financial implications of divorce; and a family lawyer can explain the legal aspects so you can understand your rights and what options you have before you move forward.  

If you are considering divorce, Hess Family Law can provide advice based on your particular situation and goals.  More information can be read on the Hess Family Law Blog Post Are You Surprised Divorce Filings Rise In January.

Source: Market Watch, Avoid these common mistakes if you’re filing for divorce in January, published January 2, 2017 http://www.marketwatch.com/story/what-not-to-do-when-filing-for-divorce-2016-12-29