In New Jersey divorce cases, all property accumulated during the marriage (whether real estate, cash, bank accounts, investment accounts, retirement plans and personal property) is subject to equitable distribution.
But what happens if an asset is no longer in existence or spent down by the time a Divorce Complaint is filed as a result of one spouse’s spending?
A Court can determine whether a spouse has dissipated marital assets and therefore should have the obligation to pay that money back. However, a careful analysis must be conducted.
If the spending has been used to pay marital debt or to fund vacations or for some other marital purpose, the Court will not find that dissipation has occurred. On the other hand, if a spouse sends money to his or her family over the objection of the other spouse, or if a spouse spends money frivolously for his or her own purposes while contemplating a divorce, a court may find that dissipation has occurred.
The following factors should be considered when deciding the issue of dissipation:
(1) the proximity of the expenditure to the parties’ separation, (2) whether the expenditure was typical of expenditures made by the parties prior to the breakdown of the marriage, (3) whether the expenditure benefitted the "joint" marital enterprise or was for the benefit of one spouse to the exclusion of the other, and (4) the need for, and amount of, the expenditure.
While not an easy thing to prove, dissipation of marital assets is an issue to be raised in some divorce cases.