Concrete Examples of Dissipation of Assets in Colorado Law
Basic Definition of Dissipation of Assets
Divorce has a tendency to bring out some of the worst behavior in adults. No matter how well balanced and level-headed a person may be in another context, when it comes to the divorce process, nearly anyone can be reduced to lowly behavior. One of the worst kinds of lowly behavior which occasionally comes out in the divorce process is something referred to as “dissipation of assets.”
When someone has reason to anticipate an upcoming divorce, or already has firm knowledge that a divorce is imminent, that person is not allowed to recklessly or selfishly dispose of marital assets. The reason for this is simple: given that divorce is imminent, the marital assets are not really the exclusive property of one spouse, but belong to both spouses and must be divided according to established legal principles. When one spouse engages in reckless or selfish spending prior to the creation of a private settlement agreement, or formal division by a Colorado court, that spouse may be guilty of “dissipation of assets.”
When one spouse engages in dissipation of assets, there can be various remedies. Here, we will layout a few common examples of this type of behavior so that future litigants can better identify when dissipation has occurred.
Example #1: Marital Funds Used on Extramarital Affair
This is a very common phenomenon: one spouse engages in an extramarital affair, and during the course of the affair a considerable portion of marital funds are used for the benefit of that adulterous spouse and his or her extramarital partner. If you uncover that your spouse has engaged in an affair, this may be a reason to research your finances and ensure that dissipation of assets hasn’t happened. In some cases, funds may be recovered even if the adulterous spouse wasn’t aware of divorce litigation at the time the marital funds were spent. If a spouse spends lavishly on an affair – i.e. spending marital funds on trips, gifts, etc. – this is a classic example of dissipation of assets.
Example #2: Marital Funds Squandered on Questionable Investments
Another common phenomenon is the squandering of marital funds on questionable investments in anticipation of divorce. Suppose you drop the news of your desire for divorce to your spouse, and then your spouse turns around and suddenly begins “investing” in all sorts of dubious investment projects. The projects might be anything – a “new” cryptocurrency, a barbershop in a rough neighborhood, lottery tickets, etc. – if your spouse begins to throw marital funds at investments which have little chance of success, this may be an example of dissipation of assets.
Example #3: Marital Funds Spent for Selfish Purposes
Another common example of dissipation of assets is simply spending which only benefits the spending spouse. This might be harder to identify in some cases, depending on precisely what the spending spouses purchases; but, if a spouse begins to make purchases which tend to only benefit him or her, this may be a case of dissipation of assets. Things may be tricky when the spending spouse can make a claim that a given purchase jointly benefits both spouses – for instance, a car or boat might “arguably” benefit both spouses, even if the buying spouse has no intention of the purchase being mutually beneficial. But, other purchases are more straightforward examples of dissipation of assets – for example, when a spouse uses marital funds to take a solo vacation immediately after the divorce is announced.
It’s important that you be able to identify possible examples of dissipation of assets so that you can ensure that your marital estate is protected. If a spouse is guilty of dissipation of assets, the court may impose a variety of remedies to ensure that you don’t suffer financially.
Contact the Drake Law Firm for More Information
If you would like to learn more about dissipation of assets, including potential remedies for dissipation of assets, or another related topic, reach out to one of the family law attorneys at the Drake Law Firm today by calling 720-790-7364.