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When one spouse spends money or uses other marital assets on non-marital purposes – i.e. purposes which don’t benefit both parties – in anticipation of divorce, or when the relationship is clearly at a point of irretrievable breakdown, this will qualify as “dissipation of assets” in the State of Maryland. Dissipation of assets is more common than many people might assume. The breakdown of a relationship can cause all sorts of unpleasant reactions, and the dissipation of assets is one of them. When people sense that divorce is imminent, they frequently resort to things which involve heavy spending as either a coping mechanism, or in some cases as a way of directly “getting back” at the other party. For instance, when relationships end, it’s not uncommon for one spouse to gamble sums of money away at the casino, or to throw money away on vacations. If you’re the party which has been financially abused through dissipation of assets, fortunately Maryland courts can provide relief, provided that all the elements are proven.
The case of Jevaji v. Nagavalli (2019) provides a solid example of dissipation of assets. Reviewing this case will give readers a sense of how dissipation of assets maybe proven to a Maryland court when recovery is sought. Let’s explore this casein more detail.
Facts of the Case
The couple in this case was married in India in 1984, but then eventually settled in Maryland. In 2013,the wife filed for divorce here in Maryland. The wife accused the husband of engaging in dissipation of assets. Specifically, she accused him of dissipating a total of $161,000. The wife alleged that the husband had withdrawn this sum over a time period which spanned from about one week prior to the divorce to several months after the filing of the divorce.
To make her case, the wife produced financial records which documented that the husband had shifted funds from a marital account to a separate account controlled by him and his daughter. The wife also had a CPA testify on her behalf, and the CPA confirmed that the husband had indeed withdrawn $161,000 in cash and cashier’s checks over the alleged time period. The evidence also showed that the husband had essentially squandered all these funds at a casino and nightclubs. The wife contended that all the evidence was sufficient to make a determination of dissipation of assets, and that consequently she was entitled to a payment in the amount of $80,500 (or half the total dissipated).
Outcome & Discussion
The court agreed with the wife’s argument, and the court of special appeals affirmed the trial court ruling. The husband was ordered to pay back the wife for the dissipation of assets in the amount of $80,500.
In some instances, there may be a chance for the party accused of dissipation of assets to put forth a reasonable defensive argument. For instance, the other party might be able to claim that he or she was unaware of the upcoming divorce, or that the relationship was irretrievably broken. Or, the other party might argue that the assets were utilized on a marital purpose, that they were spent on something mutually beneficial for both parties. However, those avenues were clearly not available to the husband in this case, because it was quite obvious that neither of these arguments could be reasonably put forth.
To successfully make a case for dissipation of assets, the party making the case must show two things:(1) that the relationship was irretrievably broken and the other party had reasonable knowledge of this fact, and (2) the other party spent marital assets on non-marital purposes, or things which weren’t mutually beneficial. In this situation, the wife had a fairly “open and shut” case as she showed both things with relative ease.
Contact the Murphy Law Firm for More Information
If you would like to learn more about dissipation of assets, property division, or another related topic, reach out to one of the family law attorneys at the Murphy Law Firm today by calling 240-219-8825.
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