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What is the Dissipation of Marital Assets in a Divorce?

Dissipation of marital assets refers to the wasteful spending of marital assets by one spouse during or shortly before the divorce process. This can include selling off marital assets at a loss, transferring them to others or recklessly spending marital funds on frivolous expenses.

When your spouse uses marital assets for their own benefit because the marriage is undergoing an irretrievable breakdown, it will diminish the value of the marital estate and there will be less to divide. In other words, you will get a lesser share than you would have had if the dissipation did not occur.

What the law in Texas says

Texas law frowns upon dishonest conduct aimed at financially shortchanging the other spouse during a divorce. The dissipation of marital assets may amount to constructive fraud as it’s done in bad faith, and the law provides an appropriate remedy.

If your spouse is found to have misappropriated marital assets for personal gain, the court will factor that when issuing its final orders on each spouse’s share of the marital assets. For instance, the court may award you a rightful share of what’s left of the marital assets or award a money judgment in your favor if your spouse dissipated marital assets.

Protect your financial interests during divorce

It is advisable to take a proactive role during your divorce to help look out for your interests. Have an inventory of the marital assets and keep abreast of all transactions in the lead-up to and during the divorce. It will be easier to prove your case if you have the necessary financial records.

Equally crucial is understanding the steps to take when you notice suspicious transactions by your spouse that could point to the misappropriation of marital assets.