Some married couples are able to have
collaborative divorces. While a collaborative divorce does not necessarily mean a couple agreed
on every aspect of the divorce initially, it does suggest that the couple
was able to handle things amicably. In amicable divorces, couples recognize
that it’s best to end their marriage, and they both work toward
a fair resolution that both spouses can be satisfied with.
Other couples are not as fortunate. For some unraveling marriages, one
or both spouses experience anger, jealousy, or revenge and they let their
emotions get the best of them. Sometimes, one spouse is the instigator,
and the other is simply reacting. Other times, both spouses are equally
at war and they end up battling over every dollar.
Squandering Marital Property
divorce firm, we have worked extensively with both types of couples; couples who
split amicably and couples who end up in divorce litigation. We’ve
seen breadwinners or “in spouses” (spouses who control all
the money) resort to every trick in the book to try and deceive their
spouses out of their fair share. One of the most common tricks we see
is when a spouse intentionally squanders marital assets.
When a spouse intentionally squanders or wastes marital assets, it’s
called dissipation of marital assets. When a husband or wife wastes marital
property, it means they are trying to prevent their spouse from getting
what they are entitled to under California’s community property
laws. California is one of a handful of states that uses the “community
property” method of distribution.
Under this model, each spouse is entitled to half of the marital estate,
which includes all the assets and income acquired during the marriage
with limited exceptions, such as a gift or inheritance to one spouse alone.
So, when a vindictive spouse anticipates a divorce, he or she may intentionally
go out and blow the couple’s money assuming they’ll just earn
more after the divorce.
How Do Spouses Waste Marital Assets?
There are many ways a spouse can waste marital assets. A cheating husband
can pay for his girlfriend’s $5,000 a month luxury apartment or
take her on lavish vacations. A vengeful wife can sell her husband’s
$75,000 classic car for $1,000 on Craigslist. A husband can head to Las
Vegas and blow $20,000 on gambling and strip clubs over a weekend, or
a wife can get a “Mommy Makeover” (liposuction, breast augmentation,
and a tummy tuck) without her husband’s permission days before filing
for divorce. The possibilities are endless.
If a spouse is wealthy, he or she may have no problem at all throwing money
away, especially if it means spending money on a boyfriend or girlfriend
or on something for themselves that they don’t need. As the saying
goes, “Easy come, easy go” and the most vindictive spouses
would rather give the money away or lose it than see it be split between
them and their spouses.
The consequences for innocent spouses can be dire, especially if the other
unemployed or under-employed. For instance, if a husband insisted his wife quit her
job to take care of the couple’s children, she may not have any
income of her own. If she doesn’t have a college degree or if she’s
been out of the workforce for a long time, she’s probably not going
to earn much in the beginning. So, what is a minor bump in the road for
a high-earning husband or wife can be an abrupt and even stressful change
of circumstances for a stay-at-home mom or dad.
Automatic Temporary Restraining Orders
Some states, including California, protect spouses from dissipation of
marital assets through Automatic Temporary Restraining Orders (ATROs).
When people hear “restraining order,” they often think of
domestic violence restraining orders; however, ATROs are different legal tools that deal
with a couple’s finances after a divorce action is filed.
An ATRO is a court order that prevents both spouses from doing anything
major, such as emptying a bank account, selling real estate, removing
a beneficiary from a retirement account, etc., which would alter the couple’s
financial status. They also provide a solid snapshot of the couple’s finances.
“In California ATROs are summarized on the back of the Summons of
a Petition for Dissolution. They become immediately effective upon the
plaintiff when he or she files the action and upon the defendant upon
the service of a summons and remain in effect until the final judgment
is signed by the court,” Jeff Landers wrote in
“What should I do if I think my spouse is frivolously spending our
money to keep my hands off of it?” Our advice is to take a close
look at the credit card statements. It’s important to note that
a lot of companies use generic-sounding parent companies to obscure the
real nature of their businesses.
For example, if a husband was spending thousands of dollars (marital funds)
at strip clubs, dispensaries, and “massage parlors” every
week, the expenditures can show up on credit card statements as “BMBD
Enterprises” or something else that is equally unrecognizable.
If yours is a high-asset divorce, we’d probably recommend securing
the services of a forensic accountant, which can be described as a financial
detective. He or she can sort through your financial records with a fine-tooth
comb and identify any unidentified purchases, or purchases that seem like
they were too big for the purpose. From simple tricks to complex schemes,
forensic accountants know what to look for.
Does Your Spouse Have an Unfair Advantage?
Do you suspect that your spouse is hiding assets from you? To protect your
legal rights under California’s divorce laws,
contact our Los Angeles divorce attorneys today!