New Jersey Marital Property: When Your Spouse Depletes Assets

DISSIPATION OF MARITAL PROPERTY

One party may anticipate the marriage is failing, that divorce is imminent, and attempt to spend down marital assets. To that end, the wronged party may find themself in a position to receive little or nothing because of the ill will of the other party.

Similar to underemployment, the Courts will examine the circumstances surrounding the event. The party who has depleted assets will have to show the expenditure was for the joint marital venture and was not done to intentionally deprive the other spouse of equitable distribution.

The question ultimately to be answered in determining whether there has been a dissipation of marital property is whether assets were expended by one spouse with intent of diminishing the other spouse’s share of marital estate.

In Kothari, the husband dissipated marital property when he sent money during the marriage to his parents and spent other money on his own personal requirements and, accordingly, that money was includable within marital estate and subject to equitable distribution. Expenditures were not made to benefit marital enterprise; they were designed to defer from wife her equitable share of marital assets. Kothari v. Kothari 255 N.J.Super. 500, 605 A.2d 750 (App. Div.1992).

Factors to consider in determining whether there has been dissipation of marital assets include proximity of expenditure to parties’ separation, whether expenditure was typical of expenditures made by parties prior to breakdown of marriage, whether expenditure benefited “joint” marital enterprise or was for benefit of one spouse to the exclusion of the other, and need for, and amount of, expenditure.

N.J.S.A. 2A:34-23.1, subd. i. Kothari v. Kothari 255 N.J.Super. 500, 605 A.2d 750 (App.Div. 1992).