Is It Okay to Spend a Relative Large Amount of Money Before Getting a Divorce?

I seem to get a lot of questions like this lately.  When people are seeking out a divorce attorney, they always want to know what they can do with their money.  Can they take all of their money out of the bank?  Can they take half of it and secrete it from their spouse?  Can they spend it?

Under the law, when a party in a divorce case takes money and spends it, it can be considered dissipation.  The money must have been taken during a time when the marriage was undergoing an “irretrievable breakdown” and must have been spent on something not of a marital purpose.  Most marriages start breaking down long before the first divorce petition is filed, so spending the money a month before you file for divorce will still be considered dissipation.  There is no bright line to figure out what is dissipation and what is not.  If the money was taken and spent on gambling, I believe that would be considered dissipation.  If the money was taken and used to pay the mortgage, it might be considered dissipation, or it might not.  The facts of each case are different, and no hard line rule applies.

When you are undergoing a divorce, all of your financial records will be scrutinized.  It’s important that you are able to document and account for all expenditures.  If you take cash out of your account, and have no records demonstrating what it was spent on, your spouse may allege that you have dissipated those monies.  If you can demonstrate that the money was used for a legitimate marital purpose, then it is not dissipation.  Poor record keeping can lead to a claim of dissipation.

To make your case run smoother, I would recommend that you do not remove monies from your accounts.  It only scares your spouse and makes them believe that you are going to spend it.  That leads to unwarranted court attention and a waste of everyone’s time.  Instead, speak to your spouse about dividing the money and placing it in separate accounts.  That way, both of you feel comfortable that the money won’t be spent by the other, and each of you has a heads up about the withdrawal.  Communication about the money can save a lot of unnecessary hours in court.

 

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