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Don’t make it look like you’re dissipating assets

On Behalf of | Aug 1, 2022 | Divorce

If you’re moving toward a divorce, you want to be very careful about how you spend your money. It’s not that spending is prohibited by any means, but certain types of spending can raise some red flags.

For instance, you’re probably still going to have to pay all of the bills for the mortgage, utilities, insurance, taxes and much more. You also have to pay for things like gas, food and other necessities. None of these are going to be a problem, and both you and your spouse can spend freely as you move toward the divorce. So what is it that you want to avoid?

Spending down the assets

What you’re trying to avoid is a type of fraud known as dissipating assets. This is when someone intentionally tries to spend the money that both people own as a couple. They’re attempting to do this so that they get to use the money and they don’t have to split it with someone else.

Non-refundable items are often the focus of this type of dissipation. Something like a plane ticket or a concert ticket can’t be refunded after the fact. Only one person got to enjoy the benefit of that spending.

The reason that this is a problem is that marital assets are supposed to be divided between partners. If one person goes on a spending spree for three months before the money gets divided, that may mean the other person isn’t going to get what they fairly would have deserved. You don’t want to make it look like you’re trying to engage in this activity, so you just want to make sure that your spending is clearly legitimate.

This is just one side of a complicated financial divorce, so make sure that you are well aware of all of the legal steps you’ll need to take.