Dissipation of Assets
Posted By Posted by Blair Chan on Jul 15, 2015 1:36pm PDT || Jul 15, 2015
In divorce cases there is a concept called “dissipation.” Dissipation is essentially depletion of a marital asset by “misconduct.” If a party in a family law case is found to have dissipated an asset, the asset is charged against them in equitable distribution and the party must essentially repay the other for use of that asset. But what exactly is misconduct that would support a finding of dissipation?
Misconduct is very broadly defined as use of a marital funds for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown. The classic examples of misconduct that substantiates a dissipation claim are the use of funds on a non-marital affair, gambling losses, or substance abuse. However, in the recent case Dravis v. Dravis, 2015 Fla.App Lexis 10693, the Second District Court of Appeal opined that when a party withdraws funds from a bank account under the belief that the funds are non-marital, such behavior could constitute misconduct. In Dravis, the wife received $78,000 in gifts from her family and deposited the money into an account in her name. However, during the marriage, additional deposits into this account were made with marital money. The appellate court held that the intermingling of marital and non-marital money rendered the entire account marital. The appellate court also found fault with the wife’s actions of taking out the money gifted to her by her family and separating it into another account during the separation. This case sets a troubling precedent. The court appears to be inclined to label as misconduct a situation involving a spouse separating money when she appears to have a good faith belief that the money she is taking is non-marital. There should be an element of intentional wrong doing to substantiate a finding of misconduct.