When a marriage ends, each party needs to begin dividing his or her life and assets. However, while waiting for a resolution of equitable distribution, an issue may arise[no s] if one spouse has concerns that the other spouse is wasting assets. This is known as a dissipation of assets. In North Carolina, the term dissipation of marital assets is used broadly to refer to any improper waste, abuse, misuse or transfer of marital property to a third party. Examples of dissipation of assets include:
- Excessive spending on drugs or alcohol;
- Creating debt deliberately;
- Spending funds on an extramarital affair; and
- Selling property for less than it is worth.
As North Carolina is an equitable distribution state, the court is directed by law to divide a couple’s marital and divisible property in a fair manner typically presuming a 50/50 split as the baseline division. However, the court can also determine if there are factors that would justify an unequal division. One such factor includes “Acts of either party to maintain, preserve, develop, or expand; or to waste, neglect, devalue or convert the marital property or divisible property, or both, during the period after separation of the parties and before the time of distribution.” (N.C.G.S 50-20) Therefore, the actions of one spouse to dissipate marital assets is relevant for the determination of property division in North Carolina and may leave the other spouse with a greater than 50/50 share of the marital property as a remedy for the improper conduct. To prove a dissipation has occurred, the party will need to present evidence of the marital estate of the parties as of their date of separation and what the other party has done to that estate since the separation. Typically, evidence is found in documents such as bank records, credit card statements, and brokerage statements. An experienced family law attorney can help the party with the tracing of the assets to better illustrate to the court the dissipation of the marital estate.
Contact Hatcher Law Group to consult with an experienced family law attorney to understanding your rights and options moving forward.