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Addressing the Dissipation of Marital Assets in a Divorce Case

By Lynne Strober and Jennifer Presti
November 02, 2015

The typical allegations of dissipation in a divorce include spending, sending or funneling marital monies to a spouse's extended family or friends, gambling debts, bad business decisions, and spending money on extramarital affairs. The critical question in these situations is, at what point does one spouse's gifts to family or'friends, or their bad investments and/or extravagant spending, become considered dissipation in the eyes of an adversary looking to review a case or the judiciary, and what remedies are available to a spouse where a dissipation has been found to have occurred?

In the state of New Jersey, for example, N.J.S.A. 2A:34-23.1 (i) requires the court, in making an equitable distribution of marital property, to consider the “contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property.” (Emphasis added.) It is not uncommon for one spouse to hide and/or spend down marital assets in the anticipation of divorce. A matrimonial law practitioner is all too familiar with the term “divorce planning,” and the dissipation of a marital asset is often a key strategy employed for that purpose. The New Jersey Legislature did not define “dissipation” of marital property; however, case law gives courts and practitioners a definition and framework for review of dissipation claims.

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