When dividing marital property in divorce, New York follows the principle of equitable distribution. This means that, instead of splitting the property 50/50, the court considers a range of factors such as the length of the marriage, each spouse’s income and property and their contributions to the marriage.
Because of this, some people may intentionally spend or waste assets before or during the divorce. They may do it to manipulate the process and keep a larger share of the marital property, while others may simply do it out of spite. Not only can this undermine the fairness of the asset division, but it can also lead to heavy penalties for the offending party.
In what ways can a person dissipate marital assets?
Wasteful dissipation of assets involves reckless actions that significantly reduce the value of the marital estate without fair consideration. This includes:
- Buying expensive gifts or items using joint funds without the other party’s consent.
- Losing large amounts of money through gambling.
- Gifting or transferring assets to friends or family members without fair compensation.
- Purposefully damaging or destroying marital property.
To prevent these, courts often issue restraining orders during proceedings that prohibit both parties from making major financial transactions without approval.
What are the penalties?
If the court finds that a party has recklessly spent or transferred marital assets, they can:
- Order the offending party to pay fines or return the hidden assets to the marital estate.
- Change the division of the marital property to compensate the non-offending party.
- Order the offending party to pay the legal fees and costs that the non-offending spouse incurred while proving asset dissipation.
If a person doesn’t follow orders to disclose or return assets, they could be held in contempt of court. This can lead to more penalties, including jail time in extreme cases.
You deserve a fair and just outcome
Navigating a complex divorce can be incredibly challenging, especially when issues like wasteful dissipation of assets might come into play. Know your rights and explore your legal options today.