By Stacey N. Warren

When a party is concerned about their spouse’s spending (or whether they believe their property will disappear during the divorce process), they can request a court order that will require the parties to preserve their assets until the entry of the final decree.
 
An “order to preserve assets” will restrict the parties’ spending and ability to sell, trade, or even acquire property during the divorce. It is a temporary order that may remain in place until the final decree of divorce is entered. If a party ignores the order, they may be held in contempt of court. 
 
Whether or not there is an order to preserve assets in place during a divorce, a party may argue there has been a dissipation of assets. If a court determines one party has wasted or dissipated assets, it may consider that as a factor in the final division of the parties’ property. Here’s how the court will determine if a party has dissipated assets:

  • Purpose. The court looks to see if the evidence supports the claimed expense purpose and, if so, whether the purpose amounts to dissipation under the circumstances. The spending party will likely need to show how they spent the funds (or how they disposed of the property) through testimony, producing receipts, or providing other tangible evidence. 
     
  • Timing. When assessing the purpose of the expenditures, the court looks at the timing of the expenses relative to the separation or the date the divorce action was filed. It will look at whether the expense was typical of the parties before their separation or filing and whether it benefited both parties or only one party. The court may consider the timing and the form of the debts. Cash advances or questionable loans may cause a set aside of the obligation to the party who incurred it, separate and apart from the division of marital assets.
     
  • Need and amount. The court will examine the need for and the amount of the expenditure. 
     
  • Intent. When there is a dissipation argument, it may sound like the parties are arguing about “fault.” To a certain extent they are, as the court will look at whether the dissipating party intended to hide, deplete, or divert the marital asset. When someone spends money on an unrelated party (like a new girlfriend or boyfriend) during a divorce, a court will look at that unfavorably and hold it against the spending party. 


When the court finds an asset has been dissipated, that asset is typically included in the marital estate and awarded to the spouse who wasted it. (Don’t be that party…no attorney likes to defend that spending!)