Marital fault on the part of one spouse is not one of the factors that may properly be taken into account in determining equitable distribution of marital assets in a given case. However, by statute, the court is required to consider “the contribution of each party to the acquisition, dissipation, preservation, depreciation or appreciation in the amount or value of the marital property.” Although the term “dissipation” is not defined in the statute, and “is not susceptible to a precise definition,” case law reveals that “the concept is a plastic one, suited to fit the demands of the individual case.”
Generally, “dissipation” may exist where one spouse utilizes marital property for his or her own benefit and for a purpose unrelated to the marriage at a time when the marriage relationship was in serious jeopardy – the facts and circumstances in a particular case must be analyzed to determine whether a given course of conduct constitutes dissipation as contemplated by the statute. Where one party spends marital funds extravagantly or to his or her own benefit, the amount of property available for distribution by the court will obviously be diminished; however, each spouse is generally vested with the authority to spend marital funds for his or her own enjoyment until such time as the parties are contemplating a divorce. As discussed in detail in Kothari v. Kothari, dissipation of marital assets involves an attempt to reconcile these conflicting interests in the marital estate.
In the Kothari matter, the Defendant/Husband sent thousands of dollars to his parents in India, which he asserted was to satisfy his moral obligation to repay money he received from them to finance his medical education and initial passage from India. Although Plaintiff/Wife knew that marital money was being sent, it was clear to the court that she objected to this arrangement. The trial court concluded that, although the parties had accumulated essentially nothing during the marriage, the parties’ funds acquired during the marriage “went somewhere” and, therefore, Plaintiff/Wife was entitled to enjoy a fifty-percent (50%) interest in those assets.
On appeal, the Appellate Division noted that several factors must be considered when one party asserts that marital assets have been dissipated including (1) the proximity of the expenditures to the parties’ separation, (2) whether the expenditure was typical of expenditures made by the parties prior to the breakdown of the marriage, (3) whether the expenditures benefitted the “joint” marital enterprise or were for the benefit of one spouse to the exclusion of the other, and (4) the need for and amount of the expenditure. In affirming the trial court’s determination as to dissipation, the Appellate Division found it clear that the expenditures were not made to benefit the marital enterprise, served only Defendant/Husband’s personal interest, and were designed to divert from Plaintiff/Wife her equitable share of the marital assets. The Appellate Division also determined that, although the marital funds may not have been “in existence” at the filing date of the Complaint for Divorce, a finding of dissipation may necessitate that the asset subject to distribution take the form of a cash indebtedness to be imposed by the court upon one spouse in favor of the other. In regards to marital fault, the Appellate Division approved the trial court’s consideration of Defendant/Husband’s abandonment and callous disregard of his family, not because the conduct reflected marital fault, but because the conduct revealed an intent to deny Plaintiff/Wife her share of marital assets.
Whether or not marital assets have been “dissipated” as contemplated by the statute depends upon the facts and circumstances in a particular case. If you have any questions in regards to divorce in New Jersey, dissipation claims as to marital assets, equitable distribution, or any aspect of family law, you may wish to consult with an experienced attorney. This article is for information purposes only, and is neither legal advice nor the creation of an attorney client relationship.
Justin M. Smigelsky, Esq. / Timothy J. Little, P.C. / 2017 – All Rights Reserved
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Divorce, equitable distribution of assets and liabilities, alimony, domestic violence, child custody, child support, parenting time, emancipation applications, removal applications, Marital Settlement Agreements, post-judgment enforcement and modification applications