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Marital Asset Management and Divorce

One way a spouse may react to an imminent divorce is misusing marital assets to punish their partner. Using marital assets irresponsibly right before or in the course of a divorce can have serious financial implications, especially where children are still under their parents' care and where one spouse is entirely financially dependent on the marital assets.

Read on to learn more about asset dissipation and what you can do to future-proof your finances in a divorce.

Marital Asset Dissipation

The intentional misuse of property by one spouse for their personal benefit in anticipation of divorce is known as marital asset dissipation. Timing and your spouse's behavior are important when proving asset dissipation.

Examples of behavior that may constitute dissipation include using marital assets to fund an extramarital affair, spending excessively on drugs and alcohol, losing money and assets to gambling, giving assets to family and friends, or refusing to make mortgage payments.

A poor business decision that results in loss of some marital assets may not be deemed as dissipation unless you can prove that your spouse made the decision in bad faith.

Mutual Restraining Order 

In Georgia, every divorce decree automatically features a Mutual Restraining Order (MRO) that requires both spouses to refrain from using marital property in ways other than to support the usual course of business.

The usual course of business means activities that you and your spouse have typically been responsible for, such as paying bills, purchasing groceries, and attending to the regular household expenses.

Taking out money from an account to pay for legal fees for the divorce process may also be a usual course of business expense.

Violating the provisions of an MRO has serious legal implications including payment of court fines and potential incarceration in case of gross fraudulent marital asset dissipation.

Debt 

As the non-spending spouse, you might be worried that your spouse's dissipation of marital assets could result in you sharing the debt.

Usually, the court equitably allocates assets and debts incurred in the course of a marriage. This means, one spouse may end up partially bearing the burden of debt that the other spouse incurs.

However, if the court determines that your spouse's behavior amounted to dissipation and resulted in debt, the court will charge this debt solely to your spouse.

Legal Action

You may take several steps to protect marital assets from dissipation during divorce proceedings.

File a Notice of Lis Pendens 
A Notice of Lis Pendens gives notice to third parties who are interested in purchasing a piece of property of your right to the property. The notice will remain in place until the court issues a final judgment in your divorce case.

Consider filing a Lis Pendens if you acquired real estate and other valuable properties in the course of the marriage.

In Georgia, only property acquired in the course of a marriage, regardless of ownership, is subject to equitable distribution in the event of a divorce.

Separate Funds
If you are concerned that your spouse will drain a shared account, consider withdrawing half of the funds and securing them in a separate account. However, speak to your attorney to determine the legal implications of such an action based on the specificities of your situation.

Bear in mind that you cannot use the funds you place in a separate account in ways other than to support the normal course of business.

The question of marital asset distribution during a divorce can be extremely contentious especially where substantial amounts of assets are at stake. The good news is, if you act early, you may be able to stop your spouse from jeopardizing your and your children's safety net. 

At A. B. Olmos & Associates, P.C., we understand the turmoil of divorce. You do not have to go at it alone. Let our skilled and compassionate attorneys help you protect your assets and obtain the best outcome from your divorce.
A.B. Olmos & Associates P.C.
Druid Pointe Bldg.
2751 Buford Hwy., N.E. Suite 775
Atlanta, GA 30324

In Business Since 2006

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