Dissipation of marital assets is when one spouse intentionally removes marital assets from the marital estate, so those assets are no longer available for the court to distribute between the parties. In most jurisdictions, including Orlando and Orange County, parties are protected from the dissipation of marital assets after the divorce petition is filed. Once the divorce petition is filed the administrative orders prohibits either party from dissipating marital assets. If a party violates such an order, they may be held in contempt of court. If you suspect that your spouse may be dissipating assets, it may be prudent to file a Petition for Dissolution of Marriage as soon as possible.
Dissipation of marital assets may occur in several ways. For example, knowing that a divorce is imminent, a spouse might intentionally transfer assets out of the marital estate before the divorce petition is filed. Another common example is when a spouse is spending finds on expensive gift for a lover or paramour instead of contributing that money to the marriage. Dissipation can also occur when a spouse pays the rent for a lover or gives a “loan” with no re payment provisions. While this list of examples is certainly not exhaustive, it provides some common examples of dissipation.
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In Florida, marital assets are divided equally between the spouses, unless the court finds a reason to do otherwise based on factors outlined in Florida Statute 61.075 (1). Under subsection (i) of that Statute, the dissipation of marital assets is a factor that courts may consider in determining whether to award an unequal division of marital property. It specifically provides that a court may look at “the intentional dissipation, waste, depletion, or destruction of marital assets after the filing of the petition or within 2 years prior to the filing of the petition.” However, case law provides that the court may go back further than 2 years in certain circumstances.
To provide for an unequal distribution, the court must make specific findings based on evidence presented at trial that a spouse has intentionally dissipated marital assets. This means that it is important to present your best case and all of your evidence in support of your accusation of dissipation of marital assets to the Judge to persuade the court that your spouse had the intention of dissipating assets. You also need to make sure that the trial court includes in its ruling the factual bases for its determination. If you have not provided sufficient evidence for the court’s ruling, or if the court fails to put in its judgment the facts it relied on for its decision, the court’s ruling is likely to be overturned on appeal.
If you are defending against an accusation of dissipation of marital assets, your attorney’s job at trial will be to show that you had no such intent. For example, your spouse might argue that you intentionally dissipated inventory from a family owned business. You might show in response that inventory was reduced because of a legitimate need to downsize. Often one spouse will accuse another of mismanaging funds or over-spending. Mismanagement of funds or spending more money than your spouse thinks is prudent ordinarily will not result in an unequal distribution of marital assets.
An unequal distribution of marital assets when dissipation has occurred is designed to protect the non-offending spouse and allows the court to recapture the dissipated funds into the marital estate. For example, if the court finds that the wife has dissipated $50,000, the court might add that amount back into the marital estate before equally dividing the assets. The reasoning behind this is that if the wife had not dissipated the assets, the $50,000 would still be part of the marital estate and the parties would each be entitled to half of it. While this approach serves to make the husband whole, it does not punish the wife for the dissipation, since she still gets the half she otherwise would have received. Therefore, after establishing intent to dissipate, the non-offending party may want to argue for an even greater unequal distribution and for a contribution towards attorneys’ fees.