Many of us are likely familiar with the stereotype: a marriage is irretrievably in breakdown and one spouse, sensing the end, decides to go out, drain the marital accounts and either blow that money or else hide it. This is something called “dissipation of assets” and it is potentially very harmful to the spouse on the other end. When that happens, you need to know how to respond, which is one reason (among many) why you need experienced Maryland family law counsel on your side as you prepare for, and then go through, the divorce process.
Dissipation of assets is defined as “where one spouse uses marital property for his or her own benefit for a purpose unrelated to the marriage at a time where the marriage is undergoing an irreconcilable breakdown.” So, if one spouse depletes marital assets during the marriage’s final decline (or during the divorce action) and uses those proceeds on things that benefit only him/her individually and not the marital unit, then that is dissipation.
In a case where your spouse has squandered, or absconded with, marital funds, there is a multi-step process in court that must take place. First, you must give the court enough evidence for the judge to find that you’ve established the basic elements of dissipation as defined by Maryland law. (This is called establishing a “prima facie case.”) Once you’ve demonstrated that to the court, then the burden shifts to your spouse, who must show that he/she didn’t dissipate the funds but spent them on a legitimate marital purpose. (For example, if you withdrew substantial sums from the marital checking account but did so to pay the mortgage payment on the marital home and the rent on your one-bedroom apartment after your spouse asked you to move out, then those expenses are valid and are not dissipation.)
Here’s an actual example from a recent opinion issued by the Court of Special Appeals. P.J. and I.J. were a couple who married in India in 1984 and filed for divorce in Maryland in 2013. The wife accused the husband of dissipating a substantial sum. The court agreed, finding the amount dissipated was $161,000, meaning that the husband owed the wife a monetary payment of $80,500.
The evidence regarding the dissipation consisted of multiple very large withdrawals that the husband made from the marital bank account, much of which he moved into a joint account he shared with his daughter. The wife also had expert witness testimony from a Certified Public Accountant, who opined that the husband had withdrawn at least $161,000 in cash and cashier’s checks from the couple’s marital bank account starting a week before the divorce filing and continuing for several months thereafter.
That was enough to meet the “prima facie” requirement. This shifted the burden to the husband, but his testimony only strengthened, rather than defeated, the wife’s arguments. The husband admitted that he spent much of the money at casinos and nightclubs. These obviously weren’t marital purposes, so the trial judge was correct in finding that the husband dissipated the assets and ordering him to make the $80,500 payment to the wife.
For all of your divorce and family law needs, consult skilled Maryland family law attorney Anthony A. Fatemi, who has been helping Maryland spouses and parents for many years to work toward helpful solutions to their issues. To find out how we can help you, contact us at 301-519-2801 or via our online form.
More blog posts:
Dividing a Business in a Maryland Divorce When the Business is Marital Property, Maryland Divorce Lawyer Blog, Feb. 27, 2019
Dissipation of Marital Funds in Maryland, Maryland Divorce Lawyer Blog, Nov. 26, 2013