Spending Money and Assets Prior To a Divorce: What To Know

By: James HansenSeptember 7, 2024 -
Spending Money and Assets Prior To a Divorce: What To Know

Divorce is a challenging process that affects every aspect of life. One of the biggest concerns for divorcing spouses is how marital assets and property will be divided.

In Arizona, the division of assets is governed by the principle of equitable distribution. This means that property is divided fairly, though not necessarily equally, between the spouses. The court closely scrutinizes how spouses spend money leading up to a divorce, especially when it may affect the equitable division of assets.

Understanding the implications of spending money and managing assets before a divorce is crucial for anyone going through this difficult time. At Genesis Family Law and Divorce Lawyers, we are here to help you.

Learn more about money and assets during the divorce process. Then, contact our divorce lawyer for a free case consultation.

Marital Assets and Property

In the context of divorce, marital assets refer to all property and income acquired by either spouse during the marriage. This includes tangible items like real estate, vehicles, and bank accounts. It also covers intangible assets such as retirement accounts and investments.

Marital property is subject to division during divorce unless a prenuptial agreement or other legal arrangement specifies otherwise.

In Arizona, anything that is considered marital property will be subject to equitable distribution by the court. This means that the court will divide the assets in a way that is deemed fair. It will consider various factors such as the length of the marriage, the financial situation of each spouse, and contributions to the marriage. This includes contributions, financial or otherwise.

Spending Money Prior to a Divorce: What It Means

Spending money prior to divorce: what it means

Some spouses may be tempted to start spending or transferring money from joint accounts during the lead-up to a divorce. This could be done out of fear, anger, or a desire to secure financial resources before the divorce settlement.

However, such actions can have serious legal implications. This is particularly true if one spouse is found to be dissipating marital assets.

Dissipation of marital assets refers to the improper use of marital funds by one spouse for purposes unrelated to the marriage. This could be done during the period of an irretrievable breakdown in the relationship.

Common examples of dissipation include spending on luxury items, gambling, or even an extramarital affair.

The Consequences of Dissipating Marital Assets

When a spouse believes that the other is dissipating marital assets, they can raise this issue during the divorce proceedings. The court will then examine the financial records to determine whether the spending was wasteful or improper. If the court finds that one spouse has dissipated assets, those funds may be deducted from their share of the settlement.

For instance, if a spouse spends money on gambling or an affair during the marriage, this could be considered dissipation. In such cases, the court may award a larger portion of the remaining assets to the other spouse to compensate for the loss.

Keeping Detailed Financial Records

Keeping detailed financial records

Divorcing spouses should keep detailed records of their marital finances to protect themselves. This includes bank statements, receipts, and other documentation. They must show how money was spent during the marriage. This is especially important if one spouse suspects the other of dissipating assets. These records can be used as court evidence to support dissipation claims.

Maintaining a clear and accurate record of all financial transactions can also help ensure a fair property division. Even if spending occurs after the divorce case is filed, it can still be considered dissipation. It could be deemed wasteful or unrelated to the marriage.

The Role of a Divorce Attorney

Navigating the complexities of property division and dissipation claims can be overwhelming. It is even harder during an emotionally charged divorce. This is where a divorce attorney or lawyer's expertise becomes invaluable. An experienced attorney can help you recognize your rights. We can walk you through the process and advocate for your best interests in court.

Your attorney can assist in gathering and presenting evidence of dissipation. We can help you determine what expenditures may be considered dissipation. Our team ensures that you receive a fair share of the marital assets. We can also help negotiate settlements that account for any dissipated assets. We will ensure that you are not unfairly disadvantaged by your spouse's actions.

Equitable Distribution in Arizona

Arizona follows the principle of equitable distribution when dividing marital property. This means that the court will divide assets in a manner that is fair but not necessarily equal.

The court may consider factors such as the length of the marriage, the health and age of each spouse, the earning capacity of each party, and contributions made by each spouse to the marriage, including homemaking and child-rearing.

If the court determines that one spouse has engaged in excessive spending or wasteful behavior, this can influence how the assets are divided. The court may award a larger portion of the remaining assets to the other spouse to compensate for the dissipation.

Protecting Your Financial Interests

Protect your financial interests

If you are considering divorce or are in the midst of the process, it's essential to take steps to protect your financial interests. This includes avoiding any unnecessary or extravagant spending. You should also closely monitor your bank accounts and other financial resources. Ensure that your spouse is not improperly spending or transferring funds.

In some cases, seeking a court order to freeze certain assets or accounts may be needed to prevent further dissipation. Your attorney can advise you on the best action to take if you suspect your spouse is wasting marital funds.

The Importance of Fair Property Division

A fair division of property is essential in ensuring that both parties can move forward after the divorce with financial stability. The court's goal is to ensure that the division of assets reflects the contributions and needs of both spouses. If one spouse has dissipated assets, the court will consider this when determining how to divide the remaining property.

Equitable distribution does not necessarily mean an equal split. The court has the discretion to allocate assets in a way that it deems fair. This may result in one spouse receiving a larger share of the property.

Spousal and Child Support Considerations

In addition to property division, the court may also consider spousal support (alimony) and child support. The financial needs of the spouse and children, as well as the financial resources of the paying spouse, will be considered. If one spouse has dissipated assets, this may affect the amount of support awarded, as the court seeks to ensure that the family's needs are met.

The Impact of Prenuptial Agreements

A prenuptial agreement can greatly affect how assets are divided during a divorce. If the agreement is valid and enforceable, it can dictate how certain assets and properties are handled, potentially overriding the default rules of equitable distribution. However, even with a prenuptial agreement, issues of dissipation can still arise if one spouse engages in wasteful spending of marital assets.

Contact Genesis Family Law and Divorce Lawyers for a Free Case Consultation

Contact Genesis Family Law and Divorce Lawyers for a free case consultation

Divorce is never easy, and the financial aspects can be particularly complex. Understanding the implications of spending money and assets before a divorce. You must ensure that you receive a fair outcome. At Genesis Family Law and Divorce Lawyers, we put your needs first. Are you concerned the other spouse has dissipated marital assets? If so, contact us today for a free case consultation.

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