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When we think of dissipation of assets, we tend to think of marital funds being squandered on things which are obviously inappropriate. For example, we tend to think of spouses spending money on solo vacations or on gifts for extramarital partners. These are things which we have discussed in the past as being very clear manifestations of dissipation of assets. Dissipation of assets need not take this type of form, however; dissipation can occur even when the spending has a benign or otherwise harmless purpose.
This was the case in the relatively recent litigation of Amusa v. Amusa (2023). Let’s take a look at this case so we can get a better sense of the risks associated with dissipation of assets.
Factual Outline
The husband in this litigation filed for divorce in 2019. In early 2020, the court implemented an injunction to actually prevent dissipation of assets; the order stated that the husband was barred from selling or disposing of any assets alleged to be marital property, including any property acquired during the time the parties became separated. The order titled “Injunction to Prevent Dissipation of Assets.”
The husband’s father had developed cancer, and by 2021 the cancer had reached stage IV. The medical bills of the husband’s father had become exorbitantly high, and the husband began using marital funds to provide financial assistance. Specifically, the husband used $72,800 from a savings account, and also sold off a marital vehicle and received $18,600. Thus, the total marital property which was used to pay for the husband’s father’s medical bills was $91,400. The husband acted in this way, despite the injunction, because he had an honest belief that his action didn’t constitute dissipation of assets. In this situation, the marital funds were being used for a purpose which was obviously benign. But, the injunction was in place, and the order didn’t make any exceptions for “benign purposes.” The wife attempted to recoup her portion of the funds used by the husband for medical bills.
Outcome / Discussion
The trial court awarded the wife 60% of the funds used by the husband, or approximately $55,000. The husband then appealed.
Appealing a trial court determination of dissipation of assets is not an easy endeavor. The appellate division will only overturn an award if the trial court was “clearly erroneous” in its determination. In dissipation of asset cases, the initial burden of proof is on the party making the allegation to prove that the marital funds were used on a non-marital or non-family purpose. Non-marital or non-family purpose isn’t the same thing as “non-benign.” After the party making the allegation meets this standard, the burden shifts to the defendant party to provide counter evidence which might undermine the other party’s claim. If the alleging party is successful, the appellate division will typically only overrule the trial court determination if there is “no credible evidence” cited by the alleging party, which would tend to mean that the trial court had been obviously mistaken in its decision-making. In this situation, even though the husband obviously spent the money on a good cause, he still used it for a non-family purpose; in this context, “family” means the husband and wife, not close relatives, and so the husband did engage in dissipation of assets.
Contact the Murphy Law Firm for More Information
If you would like to learn more about the risk of dissipation of assets, emergency spending in the context of divorce, property division in general in the State of Maryland, or another related matter, contact the Murphy Law Firm today by calling 240-219-5243.
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