Dissipation Of Marital Property In Maryland

The term “dissipation” is defined by the Merriam-Webster Dictionary as “wasteful expenditure.” In the context of Maryland Divorce Law, dissipation occurs when “one spouse uses marital property for his or her own benefit for a purpose unrelated to the marriage at a time where the marriage is undergoing an irreconcilable breakdown.” Omayaka v. Omayaka, 417 Md. 643 (2011). Maryland Courts have also found dissipation to occur when “one spouse spent or otherwise depleted marital funds or property with the principal purpose of reducing the amount of funds that would be available for equitable distribution at the time of the divorce.” Welsh v. Welsh, 135 Md. App. 29, 51 (2000).

It is important to note that not all expenditures made by one spouse during the breakdown of the marriage will be considered as dissipation. “What matters is not that one spouse has, post-separation, expended some of the marital assets, what is critically important is the purpose behind the expenditure. The doctrine of dissipation is aimed at the nefarious purpose of one spouse’s spending for his or her own personal advantage so as to compromise the other spouse in terms of the ultimate distribution of marital assets.” Heger v. Heger, 184 Md. App. 83, 96 (2009). For example, if two spouses separate and one spouse subsequently transfers a substantial amount of money from their bank account to reduce the balance of the account which would otherwise be available for equitable distribution, that may be considered dissipation. On the other hand, if two spouses separate and their post-separation expenditures consist mostly of transactions that were customary during the course of the marital relationship, it is less likely that a Court would find an act of dissipation.

If one spouse alleges that the other spouse has dissipated marital assets, the burden is on the spouse making the allegation to prove that such dissipation has occurred. For the spouse alleging dissipation, the “critical time is that between the separation or the time when the marriage is undergoing an irreconcilable breakdown … and the ultimate divorce.” Id. In other words, the Court is unlikely to consider transactions that occurred when the marital relationship was in a positive state when determining whether dissipation occurred. If the alleging party is able to make a prima facie showing of dissipation, the burden turns to the other party to demonstrate why such expenditures were appropriate and should not be considered dissipation.

If the Court ultimately finds that one spouse has dissipated marital property, the Court will attempt to value the property or funds which were dissipated. The Court can then account for such dissipation in its ruling by factoring the dissipated amount into a monetary award or other remedy to produce an equitable division of the marital assets.

If you believe that your spouse may have improperly disposed of or dissipated marital assets, please contact the Greenberg Legal Group (https://greenberglegalgroup.com/) for assistance.