Dissipation of Assets During Divorce in New Jersey

Our Team of Lawyers Can Help You Identify Acts to Dissipate Assets and Ensure You Get Your Fair Share During a Divorce in Red Bank, Rumson, Toms River, Point Pleasant, and Other South Jersey Communities

A divorce doesn’t have to be antagonistic or spiteful, but unfortunately, when emotions run high, hurt and resentment can replace a willingness to compromise and make logical decisions. Such is the case with the dissipation of assets. When a couple chooses to end their marriage, their inimical attitudes complicate the divorce process.  When a marriage goes sideways, rather than wait for an equitable division of the marital property, one spouse may begin to pilfer their savings and sell everything jointly owned.  They may incur debts by opening a new line of credit.  This is what is referred to as a dissipation of assets.

Divorce often takes a toll on one’s emotions, and the added financial intricacies can exacerbate the strain. Our attorneys at The Bronzino Law Firm can help you identify and manage the dissipation of assets in Mantoloking, Toms River, Wall, Eatontown, Red Bank, Little Silver, Monmouth, Ocean County, and throughout the Jersey Shore. Call (732) 812-3102 or reach us by filling out this form.

Identifying Asset Dissipation During NJ Divorce

There are several clear signs of asset dissipation. When your spouse begins to give large amounts of money to family members, friends, or other third parties or spends money on trips, vacations with a love interest, and fine dining, it is an apparent dissipation of assets. Making large withdrawals or transferring money to an individual account is another sign. Maxing out credit cards, taking out a second mortgage on the family home, and buying big-ticket items such as cars, boats, or jewelry are ways they accumulate debt, hoping their spouse will have to pay them off.  Destroying shared property or purposefully running a family business into the ground is a way to dissipate assets.  Some spouses gamble away marital funds or turn to substance or alcohol abuse to battle their upset over the coming end of their relationship.

Unusual Spending During Divorce

When a substantial increase in expenditure occurs just before or during the divorce process, it could be perceived as a dissipation of assets. If large purchases or withdrawals were made in proximity to the divorce filing, it can be judged as a dissipation of assets. Other instances are when the expenditure wasn’t agreed upon by both parties or was atypical of the amount usually spent by the household.

Importance of Asset Classification

Not all assets are marital ones. Those acquired before the marriage or inherited and not combined with family finances are not included.  For example, if one spouse inherited a large sum of money from their dearly departed grandmother, kept it in a separate account, and didn’t use it for so much as a light bill, it isn’t considered a marital asset.  If, however, a portion of the inheritance was used to buy a minivan used by both spouses or to pay off marital debts such as credit cards, it becomes a marital asset. It will be included in the equitable distribution during the divorce.  Anything considered a marital asset squandered or sold is regarded as a dissipation of assets.

How NJ Courts Analyze Spending in Asset Dissipation Cases

The court will first examine how close the money was spent to the decision for divorce.   It will analyze the amount of the expenditure and whether it benefitted the couple rather than one spouse.  Additionally, the expenditure amount will be taken into account, including whether or not it was necessary and whether or not it was a financial transaction out of the ordinary.  If it is determined that the assets were liquidated or additional debts were acquired to deprive the other spouse of what they would be entitled to in the equitable distribution process, it is considered dissipation.

Steps to Safeguard Your Finances During a New Jersey Divorce

If you suspect your spouse is absconding with the marital piggy bank, you can close all lines of credit and bank accounts you share. Sometimes, closing all of your shared bank accounts and lines of credit can prevent you from accessing the money you need for daily expenses.  You can request a temporary restraining order on the marital assets in New Jersey.  This doesn’t close your accounts, but it does advise the banks and other financial institutions that large sums of money being spent or moved around require scrutiny.  Another tip is to monitor your accounts through online banking closely.

Compensation for Asset Dissipation in New Jersey Divorces

The court has extensive discretion to compensate the offended spouse.  They can require the guilty spouse to pay higher alimony payments, assign more marital debt to that spouse, or give them less of their share of the marital assets. Dissipation compensation does not have to reflect an equitable distribution of assets.  The court can grant the injured spouse more than what they are entitled to as a form of sanction.

Wife Wins Reimbursement in Kothari Case

Mr. and Mrs. Kothari were married in April of 1981 and lived in New Jersey.  The husband was a doctor in India, and after moving to the U.S., he prepared to get his license to practice medicine.  The couple lived with the wife’s sister and supported themselves off his earnings.  They had a child in 1985.

From October 1987 through August 1989, Mr. Kothari began divorce proceedings in Illinois, Ohio, and the District of Narol in India, but none of the processes reached a legal conclusion.  He finally filed for divorce in New Jersey, where the divorce came to its conclusion.  One of the primary areas of contention surrounded the large sums of money the husband sent home to his parents, claiming it was repayment of debt for his travel expenses and studies over the years.

The court’s decision was based on the following evidence:  $30,000 sent by the defendant to his parents in India was not linked to a proven debt, $19,000 obtained by liquidating marital assets in India was used solely for the defendant’s benefit, and during the almost four years his parents were living in the U.S.; he supported them by spending nearly $60,000. Due to the husband manipulating the marital money, his wife was entitled to 50% of all three amounts because they were marital assets spent only for his benefit.

The decision was upheld on appeal.

Get Legal Guidance from Our Monmouth and Ocean Dissipation of Assets Lawyers

At the Bronzino Law Firm, we have the experience you need to spot any financial mishandling of your marital assets in Monmouth Beach, Freehold, Barnegat, Manasquan, Lacey, Holmdel, and other Ocean and Monmouth County areas.  We know what to look for and how to get you your fair share of the marital assets you worked so hard to obtain.  We will gather the evidence necessary to convince a judge you deserve a larger share of the assets to compensate for the funds your spouse squandered.

Divorce is a painful process, made even worse when you are betrayed by someone you once loved.  Don’t let their poor choices leave you penniless. We are skilled negotiators and litigators who won’t give up until your case is resolved. For a free consultation to discuss how we can help you, call us today at (732) 812-3102 or contact us online to schedule a consultation.