Dissipation of marital property in Maryland occurs when one spouse uses the marital property for a benefit unrelated to the marriage while the marriage is falling apart. In a 2011 case, a couple had married in 1998 and was divorced less than 10 years later. During the divorce, the wife filed an amended complaint for divorce claiming all property issues had been resolved.
The husband answered that they hadn’t been, claiming that the wife had taken $80,000 of marital funds without his knowledge or approval while the divorce was pending and were not used for a family use purpose. He claimed some funds were wired overseas. He asked that the court order his wife to account for the funds and grant him a monetary award.
At a hearing, the husband’s lawyer called the wife to testify. The wife’s testimony conceded that she had opened two bank accounts that were only in her name. She also conceded she had made withdrawals of $80,000. She denied dissipating marital funds, testifying she had spent the money on family uses such as clothing, food, health insurance, rent, the car, her kids overseas, and the babysitter.
The Circuit Court granted the divorce, but denied the claim of dissipation. It found that the husband had not met his burden of showing the money was spent for the wife’s own benefit or purpose unrelated to marriage because the only evidence was the wife’s testimony that the money had gone to family uses. The husband had not met the threshold question. The husband’s attorney argued that the wife had not provided corroborating evidence, but the court stated that the wife’s testimony under oath did not need to be corroborated.
The husband appealed on the issue of dissipation, asking the appellate court to vacate that aspect of the judgment. The appellate court noted dissipation could occur even when the marriage was not falling apart or the principal purpose of spending martial funds was something other than reducing the marital funds available for distribution through the divorce. It happens when one spouse takes funds without the other spouse agreeing to the taking.
The issue is whether the spouse that takes the funds intended to defraud the other partner. Part of the trial court’s job is to equitably distribute marital property and it cannot distribute funds that have been taken or dissipated.
The appellate court reasoned that what was most important was the purpose behind the wife spending the money. The trial court’s factual findings had to be clearly erroneous to be reversed. The husband argued that the trial court had not followed the proper steps. It argued it had presented a prima facie case and therefore the wife had to produce evidence to prove her expenses were appropriate.
The appellate court rejected the argument, ruling that the burden of persuasion and the initial burden of production fell on the husband as the person alleging dissipation. Simply showing a spouse made sizable withdrawals was not enough to show dissipation. The appellate court affirmed the judgment.
If you and your spouse have decided to divorce, contact an experienced Maryland family law attorney for representation. Contact our office via the online form for a legal consultation.
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