Divorce & Dissipation of Marital Assets
A common fear of people contemplating divorce is that one party is going to disappear with all of the assets once they learn that a divorce petition has been filed. This is known as dissipation of marital assets and includes attempting to hide assets by transferring funds to family members, wiring funds to other countries, or simply incurring huge debts on credit cards in retaliation for the one spouse seeking divorce. In Orange, Osceola, and Seminole counties, the courts have established a standing administrative order, which directly forbids these types of actions.
The standing administrative order states, in part, that neither party may conceal, damage, or dispose of any asset, whether marital or non-marital, and neither party may dissipate the value of an asset. For example, a party cannot add a mortgage to a piece of real estate or draw off of a HELOC (home equity line of credit) without the written consent of the other party. Additionally, a party cannot fail to take care of any asset. Both parties are expected to continue with their customary conduct for their business and personal affairs. In other words, if you try to dissipate marital assets, you may be held in contempt of court.
In the event that a spouse attempts to dissipate marital assets, section 61.11, Florida Statutes, allows for an injunction to be issued preventing the spouse from conveying or concealing the property. Once it is shown that a party has dissipated marital assets, the next step is to determine if the asset is recoverable. This usually requires tracking the transactions through bank records or other records of the financial institution. Typically, third party subpoenas can be utilized in order to determine the funds that were removed and where they were sent. However, in the event that cash or tangible assets are dissipated, it may be nearly impossible to track or recover the asset. Generally, in these cases, the trial judge will need to value the dissipated asset and offset the value when calculating equitable distribution.
If sufficient assets don’t remain in the marital estate to compensate an injured spouse for the other spouse’s dissipation of assets, Florida courts can, and will, look to the dissipating spouse’s separately owned assets, non-marital assets. While non-marital assets are normally protected from distribution in a divorce, a judge can consider and distribute these assets under certain circumstances, such as dissipation.
Proving dissipation can be a difficult and burdensome task. In an abundance of caution, it is always advisable to arm yourself with knowledge prior to the divorce, especially prior to filing the petition for dissolution. It is recommended that you gather as many financial documents as possible prior to filing for divorce. This allows you to gain insight to important financial information, which will only further assist in the discovery process during the divorce. Further, this allows the attorneys to send third party subpoenas directly to the bank or financial institution to acquire the necessary documents and bank statements to ensure that assets were not dissipated.
A contested divorce can be a lengthy and complicated process. However, with proper preparation and knowledge you may be able to avoid many costly pitfalls.