How Can I Address Wasted or Dissipated Assets During My Divorce?

 Posted on February 24,2021 in Complex Property Litigation

The breakdown of a marriage will often involve strong emotions and heated disputes between spouses, and this can sometimes lead people to behave inappropriately. In some cases, a spouse will waste money or act in ways that result in the loss of marital assets. This is known as the dissipation of marital assets, and it can take a variety of forms. A spouse may make large purchases solely for their own benefit, or they may spend money while having an affair. In some cases, spouses may even purposely destroy property or otherwise waste money or assets in an attempt to harm their spouse. These actions can affect the division of marital property during the divorce process, and complex property litigation may be needed to address this issue.

Fraud on the Community

Asset dissipation is a form of fraud against the “community” of a couple’s marriage, although it will usually not result in criminal charges. In some cases, dissipation may constitute actual fraud if a person acted dishonestly with the purpose of depriving their spouse of the use of marital assets. However, in most cases, dissipation is considered “constructive fraud on the community,” meaning that a person used, gave away, or otherwise disposed of marital assets without their spouse’s consent.

If a family court judge determines that a spouse has committed fraud on the community, they will determine the value of the “reconstituted estate,” which is the total value of the couple’s assets before the dissipation occurred. The reconstituted estate can then be divided between the spouses, and a judge may award a greater share of the assets to the wronged spouse, require the spouse who committed fraud on the community to make a monetary payment to the other spouse, or both.

Temporary Restraining Orders

If you believe that your spouse has dissipated assets or intends to do so, you can petition the court for a temporary restraining order to preserve marital property and ensure that it can be divided fairly. A temporary restraining order may apply to either or both spouses, and it can prohibit actions such as:

• Selling or transferring property or assets
• Incurring debts other than divorce-related legal expenses
• Withdrawing money from bank accounts
• Accessing a safe deposit box
• Changing beneficiaries on life insurance policies
• Canceling or failing to make payments on health or auto insurance policies
• Making changes to income tax withholding on a person’s income
• Destroying or disposing of financial records
• Spending money for purposes other than reasonable and necessary living expenses

Contact Our Austin, TX Asset Dissipation Lawyers

The dissipation of marital assets can be a major concern for divorcing spouses since one spouse’s actions can affect the financial resources available to the other spouse during and after the divorce process. If you are concerned about the possibility that your spouse may try to cause you financial harm, or if you know that your spouse has already dissipated marital assets, the lawyers of Powers Kerr & Rashidi, PLLC can help you determine your best options. We will advocate for your interests to ensure that you receive your fair share of your community property, and if necessary, we will help you petition the court for a temporary restraining order to protect against the loss of money or assets. To learn more about the legal services we provide, contact our Austin high net worth divorce attorneys today at 512-610-6199.

Sources:

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.3.htm

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.6.htm

https://statutes.capitol.texas.gov/Docs/FA/htm/FA.7.htm#7.009