Watch out for the dissipation of marital assets during a divorce
The dissipation of assets refers to the unjustified spending or wasting of marital property amidst a divorce. For instance, you may notice short-term spending sprees on luxury items or sudden extravagant expenses by your spouse before the divorce process begins or even during it.
How will this affect you? Well, California is a community property state. This means marital assets are typically divided equally between the spouses after a divorce. Therefore, your rightful share of the marital estate will shrink when this happens.
Beware of these signs of asset dissipation
Recognizing the signs of asset dissipation can help you protect your financial interests and ensure a fair distribution of assets. Here are key signs to watch out for:
- Selling assets significantly below their market value
- Large cash withdrawals without a clear purpose or explanation
- Hidden or undisclosed financial accounts or investments
- Transferring funds to family members or close associates
- Unexplained withdrawals or transfers from joint accounts
- Unusual depletion of savings or investment accounts
- Discrepancies or inconsistencies in financial records or statements
Generally, any financial activity that deviates significantly from established norms or patterns can signal something is amiss. Swift action can help avert a financial disaster post-divorce, when it may be too late to undo the damage if you delay taking action.
Take proactive steps to protect your financial interests
First, maintain meticulous records of all financial transactions and assets, especially during and the months preceding the divorce. Carefully scrutinize financial records to uncover hidden or manipulated financial information. Documentation is key as it serves as crucial evidence when substantiating dissipation claims.
Most importantly, seek experienced legal guidance to understand your options, help build your case and strategize your approach to safeguard your rights and interests throughout the divorce.
