Dissipation of Marital Assets Law and Legal Definition

Dissipation of assets is the unjustified wasting of marital assets through extravagant spending, gifts, gambling or excessive borrowing or fraudulent conveyance to a third party and thereby depleting the assets.

In the context of divorce, it can include concealment and conveyance of assets as well as wasting assets through reckless and negligent acts. In divorce actions the courts can issue pretrial injunctions to prevent dissipation of assets. Generally the person accused of dissipation is under an obligation to establish by clear and specific evidence how marital funds were spent, and to prove that the funds were spent for legitimate marital expenses. However general and vague statements that funds were spent on marital expenses or to pay bills will not meet this burden. State laws on how dissipation of assets is treated in Divorce cases vary depending upon the timing of the wasteful action. Some states require that the wasting of assets occur after the marriage breaks down. Other states don't have the breakdown requirement, but instead look at whether the expenditure was made intentionally to deprive the other spouse of his or her property rights upon divorce.