Arizona is a community property state, which means that generally, that all property and debts acquired during a marriage are divided equally during a divorce. However, fairness sometimes requires deviating from this equal split. One such instance is where a spouse has engaged in wasteful dissipation of marital assets. This means the intentional or reckless depletion of assets to the detriment of the other spouse.

Types of behavior that can constitute wasteful dissipation include the following:

• Gambling losses and spending sprees — When one spouse spends large sums gambling or embarks on extravagant, unnecessary purchases, courts may view this as reckless financial conduct, especially if the other spouse is unaware or objects.

• Extravagant gifts to a third party — If a spouse uses marital funds to bestow expensive gifts or money upon a paramour or unrelated third party without consent from the other spouse, this is often considered a clear example of wasteful dissipation.

• Selling marital assets below market value — Should a spouse sell jointly owned property such as cars, jewelry or real estate for much less than it is worth, perhaps in an attempt to deprive the other spouse of their fair share, this can be evidence of dissipation.

• Racking up excessive debt for non-marital purposes — Incurring substantial credit card bills or loans to fund activities outside the marriage (like affairs, substance abuse, or personal ventures) may also be deemed wasteful.

• Concealing or transferring assets — If a spouse hides, diverts, or transfers marital assets with the intention of keeping them out of the divorce proceedings, a court may find dissipation, particularly if these actions hinder the fair division of property.

When one spouse proves that the other has engaged in wasteful dissipation, the judge dividing the marital assets has the authority to compensate the non-offending spouse by awarding them a larger share. The dissipated value, though already lost, can be added back to the marital estate for calculation purposes so that the division reflects what would have existed absent the misconduct.

The judge also may consider dissipation when making decisions about spousal maintenance (alimony). If one spouse’s reckless spending leaves the other in a precarious financial position, the court might award higher maintenance to help the wronged party regain financial stability.

Demonstrating wasteful dissipation requires detailed and meticulous proof. An experienced divorce attorney can help gather critical documentation, such as bank statements, credit card bills, receipts and evidence of unusual transactions. Sometimes, it becomes necessary to hire a forensic accountant who can unravel complex financial dealings, trace missing funds, or investigate potentially hidden assets.

The attorneys at Clark & Schloss Family Law, P.C. in Scottsdale is experienced in helping Arizona divorce litigants obtain fair spousal maintenance and property division awards. Call 602-789-3497 or contact us online to arrange for a consultation.