Why you need to be careful with your spending during a divorce

On Behalf of | Mar 14, 2023 | Divorce |

Divorce does not happen overnight. This process often takes months. A complicated divorce, especially when there’s a high level of conflict or disagreement between the parties, could even take a year or more to fully resolve.

What this means is that you’re going to have to spend money – on bills, necessities and other “costs of life” – during your divorce. It is certainly legal to do so, even though you will have to disclose your financial assets to the court. But it is important that you are careful with your spending so that it stays in line with what you would normally spend if you were not getting divorced.

The dissipation of assets

Some people will attempt to commit fraud by dissipating their marital assets. This is similar to attempting to hide assets. Their goal is simply that they will not have to split those assets with their spouse if they have already been spent, sold, etc.

But unlike hiding assets, these individuals are not trying to set money aside. They are just trying to waste it. Oftentimes, this is something that is done by a spouse who is a high earner, because they know that they can earn that money back after the divorce. They are doing it out of spite so that they don’t have to split those dissipated assets with their ex.

Of course, the lines can get somewhat blurry. You do have a normal amount of spending that you’ll need to carry out just to pay the bills. That is fine. But what if you need to make a major purchase? For instance, say that you need to buy a new car. Or what if you moved out of your marital home and you’re buying a house on your own? It’s possible that these major purchases could be seen as an attempt to dissipate the assets that you both own, so it’s important to seek legal guidance before making big purchases.

What options do you have?

Naturally, you will also want to keep an eye on your spouse’s spending to make sure they’re not trying to dissipate assets and keep them from you. If you run into any disputes on either side, it’s also important to know what legal steps you can take to resolve them.