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Understanding Waste of Assets During a Divorce

A surprisingly commonplace and definitely unfortunate situation that can occur in a divorce and during the time period leading up to a marriage dissolution case is what technically is known as waste of assets.

Definition of Waste of Assets During Divorce

Waste of marital assets in a divorce matter typically is defined as excessive spending by one or both spouses during the course of marriage dissolution proceedings (or in the period of time leading up to a case). This type of wasteful spending has a number of hallmarks, including the fact that it is unnecessary. Another hallmark is found in the fact that waste or marital assets oftentimes has a retaliatory association. In simple terms, asset waste amounts to wasteful spending.

Factors Associated With Marital Asset Waste

There are a number of factors that come into play when an analysis is made regarding whether or not certain spending by a party to a divorce is appropriate or constitutes waste. These are:

  • Amount of money being spent
  • Spending is done without the knowledge of the other spouse
  • Spending is undertaken without approval of the other spouse
  • Amount spent deviates upward from historical spending patterns

In the overall scheme of things, a determination of waste of marital assets necessarily relies on the facts at the time of an expenditure coupled with the financial circumstances of the spouses during the course of their marriage.

Waste of Assets Versus Wasting Assets

A conversation about the waste of property that occurs during a divorce needs to distinguish that process from wasting assets. There are times when the term wasting assets is utilized during a discussion of the excessive spending before or during a divorce

In the financial world, the term wasting assets is applied to a type of property that necessarily loses value over time. When the phrase is used as an alternative to waste of assets in a marriage dissolution matter, reference in fact usually is being made to overspending or misspending and not the inherent diminution (or decrease) in value of certain types of property.

Examples of Waste of Marital Assets

The stark reality is that waste of marital assets can and does come in many different forms. Common examples of waste of marital assets tied to divorce proceedings include:

  • Expensive travel
  • High-dollar gifts to friends and family members
  • Money expended on a new significant other or “lover”
  • Purchase of expensive clothing
  • Purchase of costly home furnishings
  • High dollar entertainment expenses
  • Excessive use of credit cards
  • Obtaining a loan without knowledge or consent of other spouse
  • Automobile purchase (higher dollar vehicle)
  • Money spent on gambling
  • Money spent on a drug habit
Waste of Marital Assets Is Relative to a Couple’s Financial Circumstances

As mentioned previously, an examination as to whether or not a waste of marital assets has occurred or is occurring depends upon an examination of the facts surrounding certain expenditures. It also necessitates a consideration of the wealth of the parties coupled with historic spending habits or patterns. Simply put, what is considered to be wasteful spending for one couple is not the case with a differently situated set of spouses.

Action to Compensate for Waste of Marital Assets

When a waste of marital assets is thought to be occurring during the course of a divorce, the appropriate step to take is intervention from the court. Judicial intervention can take a number of forms that include an order from the court to stop wasteful spending. In addition, a judge has the power to offset assets expended wastefully to compensate a spouse who does not engage in this type of conduct.

Your Legal Rights in a New Jersey Divorce

If you and your spouse have made the decision to seek a divorce, you need to be proactive to ensure that your important legal rights are protected fully. A key step in that regard is scheduling a free initial consultation by calling our firm at (201) 845-7400.


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