With divorce on the rise due to the COVID-19 virus and spouses being stuck at home with each other, many have learned aspects of their marriage they never knew before—such as a partner’s drinking problem, on-line gambling habit, or shopping addiction. Most lawyers have had such cases where such addictions, drugs in particular, have literally bankrupted the parties. The question is, what type of relief is there for the innocent spouse to recover wasted and squandered marital assets? This is called “marital dissipation” in legal terms. This blog covers what you need to know if you are in this situation and what your attorney and the divorce court can do to help you.
Under Indiana’s one-pot theory, all assets the parties brought into the marriage and acquired during the marriage up to the point of separation or time of filing for divorce (sometimes these are the same time, but the earliest date controls) are subject to division by the trial court.1 When most people think of assets, bank accounts, cars and houses come to mind. However, division of assets includes liabilities, so in simple terms, an equal division of the marital estate (assuming it is liquid and often it is not and requires an equalization payment) is effectuated by taking what you have, minus what you owe, and then dividing by two. This is the half each party obtains.
There is a presumption that a court should presume an equal division between (as explained above) the parties of the martial property is just and reasonable.2 However, this statute allows the court to deviate for any equitable reason, including five (5) set forth in the statute:
- The contribution of each spouse to the acquisition of the property, regardless of whether the contribution was income producing.
- The extent to which the property was acquired by each spouse before the marriage or through inheritance or gift.
- The economic circumstances of each spouse at the time the disposition of the property is to become effective, including the desirability of awarding the family residence or the right to dwell in the family residence for such periods as the court considers just to the spouse having custody of the children.
- The conduct of the parties during the marriage as related to the disposition or dissipation of their property.
- The earnings or earning ability of the parties as related to a final division of property and a final determination of the property rights of the parties.
As you can see, the conduct of a party, namely dissipation of martial assets, is a basis for the court to deviate from an equal division. The more or less legal definition of “dissipation” is use of marital assets by a frivolous and unjustified spending of marital assets. If this has occurred, you with skilled divorce counsel, have several factors to present in the evidence in the court to get an unequal division in your favor to account for the marital dissipation. These factors include whether the expenditure benefited the marriage or was made for a purpose unrelated to the marriage, the timing of the transaction during the marriage (was this years ago or as the marriage was failing?), whether the expenditure was excessive or minimal, and whether the dissipating party intended to hide, deplete, or divert the marital asset.3
The way you obtain this evidence to present in court may be a combination of discovery (getting information from the other party or third party, such as a bank, under the Indiana Rules of Civil Procedure), forensic accountant analysis, or private investigator investigations. With this, and determining and laying the proper evidentiary foundation for admission at trial, the trial court may well deviate in your favor. While deviations do not typically exceed 60/40, dissipation can be a strong reason to deviate in a greater degree because of the injury to the innocent spouse. This evidence is the key to prevailing in a dissipation case.
This blog is written by advocates at Ciyou & Dixon, P.C. who handle divorce of a wide array throughout the state. This blog on dissipation of marital assets is written to assist readers in becoming more educated legal consumers. The blog is not intended as legal advice or a solicitation for services. It is an advertisement.
