Marital Waste

 Posted on April 14, 2017 in High Asset Divorce

During divorce proceedings, both parties are prohibited from committing marital waste. This means that neither spouse can intentionally waste any marital assets just so that the other does not receive them during the divorce. Although Texas law strictly forbids the dissipation of assets during the dissolution of a marriage, marital waste still can and does occur, so if you are going through a divorce and are concerned that your marital assets are being wasted, it is crucial to retain an experienced complex litigation attorney who can represent your interests and protect your property.

What Qualifies as Marital Waste?

Texas is a community property state, which means that all assets accrued during a marriage are considered marital property and must be divided equitably between both spouses upon divorce. During divorce proceedings, both parties are permitted to use those funds for reasonable and necessary expenses, including those required to make house or car payments, pay the electricity bill, or purchase clothing. However, the parties are prohibited from wasting marital property, which could include:

• Paying for lavish vacations;
• Making large and unexplained withdrawals;
• Racking up excessive gambling debts;
• Giving large gifts to family and friends;
• Spending community funds on an extramarital affair;
• Purchasing new vehicles;
• Making significant stock investments; and
• Taking out a new loan without the other spouse’s approval.

If one spouse is engaging in this type of behavior, the wronged party can seek an automatic temporary restraining order (ATRO).

Temporary Restraining Orders

ATROs prevent either spouse from transferring a large portion of the couple’s assets during divorce proceedings without the other party’s consent. ATROs also prohibit either spouse from:

• Selling any marital property;
• Destroying or hiding assets;
• Changing bank accounts;
• Modifying the beneficiaries on an insurance policy or in a will; and
• Selling the other party’s insurance.

In some counties, ARTOs are issued automatically without a request from either party and go into effect immediately upon initiation of divorce proceedings. Finally, if a court determines that one of the spouses committed fraud against the other in order to hide or waste assets, it will:

• Calculate the value by which the community estate was depleted; and
• Divide the value of the reconstituted estate, which represents the value of the estate that would exist if the fraud had not occurred, between the parties as it sees fit.

In addition, the court also has the discretion to award the wronged spouse a money judgment against the party who committed waste.

Contact an Experienced Complex Litigation Attorney

Irresponsible behavior by one party during a divorce can have serious financial ramifications for the other spouse, so if you believe that your spouse is committing marital waste, please contact Powers and Kerr, PLLC to schedule a consultation with a dedicated Georgetown complex litigation attorney today.

Source:

https://scholar.google.com/scholar_case?case=2601322175688936295&q=dissipation+of+marital+assets&hl=en&as_sdt=4,44