Effect of Dissipation of Assets on Equitable Distribution
- May 28, 2013
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Marriage is considered a joint enterprise and equitable distribution is the means by which the court or the parties, by way of agreement, divide the marital assets in a manner fairly reflecting the circumstances by which assets and debt were accrued during the term of the marriage. When a party, without knowledge of the other, dissipates marital assets, it is possible that the court will award a greater portion of remaining assets to the non-dissipating party to compensate for the unknown dissipation. Marriage is a joint enterprise wherein both parties are free to spend as they choose, however, in the case of dissolution the matter of equitable distribution often calls into question reasonable versus elaborate spending by either or both parties. In Kothari v. Kothari, 255 N.J. Super 500 (App. Div. 1992) one party spent extravagantly upon themselves and the court found that equitable distribution required contemplation of such spending. The Kothari court found certain factors needed to be weighed in deciding equitable distribution including whether spending was proximate to separation and thereby intended to reduce assets available for equitable distribution. Whether the spending was typical throughout the marriage or only occurred at the end of the marriage and whether both parties benefited from the expenditures were also considerations. Finally, the Kothari court found the amount of and need for the expenditure must be considered. In the more recent matter of Wolfson v. Wolfson, the New Jersey Appellate Division considered the matter of a husband’s withdrawal from the parties’ home equity line of credit in the amount of $200,000 for investments he made without his wife’s knowledge and ultimately lost. The Wolfson court reaffirmed the notion that the parties joint contribution to both acquisition and dissipation were to be considered and granted the wife one-half of the amount dissipated by husband in equitable distribution. In Siegel v. Siegel, 578 A.2d 1269 (App.Div. 1990), the court addressed the consideration of gambling losses by the husband and their affect on equitable distribution. If you are contemplating divorce and you or your spouse or partner have substantially dissipated marital assets for the benefit of only one party or without the other’s knowledge, you should consult with an experienced divorce attorney immediately to protect your rights. For more information about equitable distribution, alimony, child support, divorce, dissolution of civil union or domestic partnership or other family law matters in New Jersey visit HeatherDarlingLawyer.com. This blog is for informational purposes only and in no way intended to replace the advice of an attorney regarding your specific matter.