While some California spouses conduct their divorces in a fair and amicable fashion, other divorces become rancorous and even spiteful affairs. In some cases, a spouse will try to keep from distributing assets to a separating spouse by dissipating the assets before the other spouse can claim it. Some people may not know what this term means and do not even realize they are victims of it.
According to Forbes magazine, dissipating assets is simply wasting assets to prevent another spouse from gaining a share of them in a settlement. A spouse may spend money in frivolous ways. For example, a husband may decide to lavish a lot of money on a girlfriend, or head off to a casino to gamble away a lot of cash. If the spouse already has a high income, wasting money is no problem. However, the results can be harsh for a wife who possesses little or no income of her own. The loss of potential assets can set back a person finanically and even land the individual in poverty.
Proving that a spouse is spending money with an intent to squander it is not simple. One way is to have a financial accountant track unusual financial activity on the part of the other spouse. The accountant will look for any expenses that are not clearly identified or rack up too much money for the alleged purpose. Sometimes credit card statements may contain an amount charged to a bland sounding company, but the company name might actually be the parent outfit of a frivolous business the spouse spent a lot of money on, like a strip club.
Spouses who may be victims of dissipating are not without recourse. Sometimes a person can request an Automatic Temporary Restraining Order (ATRO) from the court to keep the other spouse from altering the status quo of their finances when a divorce commences. To be effective, however, an ATRO will have to be sought as soon as possible, as it does not take long at all for a spouse to start burning through cash.
This article is intended to educate the reader on the topic of dissipation, and should not be taken as legal advice.