Dissipation of assets can be defined as the intentional use of an asset for an inequitable or illegal purpose, such as when a spouse mishandles or misappropriates marital assets with the intent of depriving the other party of those same assets when a divorce is imminent.
To be classified as dissipation of assets in the case of a divorce, the spending must be excessive, wasteful, and cannot have been approved or condoned by the other spouse. One example is when a husband opts to spend a substantial amount of money to purchase jewelry for a mistress. In a divorce, that money would be classified as a marital asset, and would be subject to equitable division. But since the husband already dissipated the funds, the woman is left to deal with financial challenges because of her husband’s actions.
Other examples of dissipation of assets are when a spouse gives away possessions or sells them to others for incredibly low prices—likely with the intention of reclaiming them after the divorce. Excessive expenditures on drinking or gambling are also valid grounds for a dissipation of marital assets claim.
Colorado is deemed a “no-fault” divorce state and any evidence of a spouse’s misbehavior has no bearing on how property is to be divided. If a spouse gives away or squanders marital funds throughout the course of the marriage, however, the other spouse may raise the dissipation argument and request that their marital assets be divided inequitably.
In order to make a dissipation claim in Colorado, a spouse needs to establish that the spending was made during the breakdown of the marriage or show that it was spent for non-marital purposes during the marriage—such as hotel rooms or plane tickets for a mistress. Once this has been proven, it is the other spouse’s burden to prove that these funds were spent legitimately. If the court finds that there indeed was a dissipation of assets, then it may opt to adjust the amounts to be awarded to each party in order to offset the dissipation.
In Colorado, there exists some form of protection against this form of behavior. The Automatic Temporary Restraining Order (ATRO) is an injunction that seeks to prevent a party from disturbing another party’s peace, and includes the prevention of dissipation of marital assets. For as long as the ATRO is in effect, neither party can conceal, encumber, transfer, or dispose of property without the other party’s consent or a without a court order.
If you have reason to believe that filing a dissipation claim is needed in your divorce, contact a family law attorney from Goldman Law Firm as soon as possible.