Introduction: Basics of Dissipation of Assets in Colorado
What Sort of Remedies Are Available for Dissipation of Assets in Colorado? As we’ve mentioned before in other posts, divorce doesn’t always bring out the best in the parties who go through it. In fact, in some cases, divorce inspires behavior which is downright shameful.
Dissipation of assets is a form of behavior which deservedly falls into this latter category. Basically, when one spouse uses marital funds for selfish purposes after that spouse knows about an upcoming divorce, or has reason to believe that a divorce is very likely, that spouse may be guilty of “dissipation of assets.”
When a spouse does this, that spouse essentially alters the property division process unfairly, because the other spouse will receive less than what he or she should rightfully receive. And, the other spouse receives a lesser share simply because of the selfish (and, in some cases, reckless and immoral) spending behavior of the offending spouse.
Dissipation of assets can take a wide range of forms, something which we’ve briefly touched on in another article. Fortunately, Colorado law provides remedies to correct this type of phenomenon. When a court determines that a spouse is guilty of dissipation of assets, the other spouse can seek remedies to balance the situation. What remedies does Colorado offer? Let’s explore a couple of common solutions to this problem.
Remedy #1: Alter the Distribution of the Marital Estate
One potential remedy which the court can implement is the alteration of the distribution of the marital estate. In other words, if the court finds that one spouse commits dissipation of assets, the court can change how it divides the marital property between the spouses. Consider this scenario: a court finds that one spouse dissipated nearly $100,000 by spending lavishly on an extramarital affair after the divorce process began. To correct this wrong, the court may divide the marital estate, ensuring the other spouse receives an additional $50,000 (since only half of the $100,000 would have gone to the other spouse) beyond what they would normally receive. In other words, the court can divide the estate, and then “tack on” $50,000 to ensure that the offending spouse properly compensates the other spouse.
This altered division of the marital estate can take different forms. The key thing is that the numbers balance out so that the innocent spouse isn’t financially damaged by the behavior of the offending spouse. So, for instance, the court might assign certain property to the innocent spouse – that is, by granting certain personal or real property in its entirety – or, the court may order that liquid assets be transferred to the innocent spouse.
Remedy #2: Compel Transfer of Separate Property
There may be situations in which the altered division of the marital estate isn’t possible, or may not be the most practicable solution, for whatever reason. In these situations, the court may compel the transfer of the offending spouse’s separate property in order to compensate the other spouse. Readers should think of it this way: when a spouse commits dissipation of assets, they are basically “stealing” from the other spouse. Or, more precisely, they are taking away the ability of the innocent spouse to have input over how those marital resources are spent. If altering the division of the marital estate isn’t an option, then the court may require the offending spouse to use his or her separate property.
Contact the Drake Law Firm for More Information
If readers want to know more about dissipation of assets, or about property division in general, or another related topic, contact one of the family law attorneys at the Drake Law Firm today by calling 720-637-2181.