“Dissipation of Assets” in Maryland Property Division

Published on
December 11, 2022
Written by
Angel Murphy

Basic Overview of Dissipation of Assets in Maryland

Property division is among the most significant and contentious aspects of divorce. This is why we have spent considerable effort discussing this important matter in the past. If one spouse behaves in a financially reckless or fraudulent manner just before or during the divorce, this can impact property division outcomes. The technical term for this type of financial misbehavior is “dissipation of assets.” The motivation for this type of behavior is usually the same or very similar: spouses dissipate marital assets to exact some form of revenge on the other spouse, usually in retaliation for initiating the divorce itself.

While this sort of behavior may not be extremely common, it is certainly not unheard of. And it happens with greater frequency than most laypeople assume.

Common Examples on Dissipation of Assets

Of course, the key thing about the dissipation of assets is that only marital assets are relevant. If a spouse recklessly wastes their own separate resources, this is irrelevant to the issue of the dissipation of assets. A spouse can drain all their separate resources during the divorce process without facing an allegation of dissipation of assets. The situation becomes quite different when a spouse begins to drain marital assets.

It’s possible to imagine all sorts of scenarios in which an allegation of dissipation of assets might be fitting. For instance, after a divorce has been initiated, a spouse using marital funds to take a new love interest on vacation might very well constitute a dissipation of assets. Or, if a spouse has reason to believe that divorce is imminent, a spouse who purposely wastes considerable assets on a “bad investment” might be guilty of dissipation. Similarly, giving away a lot of cash or assets during the divorce might also sustain an accusation of dissipation.

Key Takeaways on Dissipation of Assets

When spouses divorce, they must provide accurate disclosures regarding their current financial situation. This includes disclosures on marital assets. If a spouse hides assets, this can cause property division problems. Dissipating assets and also hiding assets can have serious consequences when it comes to dividing up the remaining assets. If, for instance, a spouse is found guilty of dissipating $50,000 from a marital account, that can cost the spouse $50,000 in the division process. Some spouses falsely assume that dissipated funds are merely “lost” and are no longer relevant; this isn’t the case. If a person is found guilty of dissipating assets, the court can take whatever action is necessary to balance out this matter and restore justice.

In practice, the court will alter the property division order so that the party guilty of dissipation receives less than they otherwise would have received.

Contact the Murphy Law Firm for More Information

As mentioned, there can be a virtually limitless number of possible scenarios in which the dissipation of assets might occur. If you’d like to learn more, reach out to one of the top family law attorneys at The Murphy Law Firm today by calling 240-493-9116.

Angel Murphy

Personable. Passionate. Persistent.

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