When spouses with substantial wealth get a divorce in Indiana, the stakes are immense. Every single investment and asset demands meticulous precision and careful accounting. A serious risk to the fair division of your complex marital estate is when your spouse improperly depletes funds.
This process, known as dissipation, can seriously destroy your net worth. Understanding the legal definition of dissipation under state law is paramount. You need to know how to trace and recover these wasted funds and how they relate to Indiana’s “whole pot” system for dividing marital assets.
What is the legal definition of dissipation?
In Indiana, the law generally defines dissipation as the unjustified or wasteful use of marital assets by one spouse. Crucially, the wasting must be for a nonmarital purpose and outside the legitimate financial patterns of the marriage.
The court will consider the parties’ conduct during the marriage as it relates to dissipation, but it often focuses on activity that occurred at or during the period of the marriage’s breakdown.
The poor financial judgment you both accepted during the marriage does not count. The court will look for proof that the funds were spent in a way that was destructive or entirely outside the established, legitimate financial patterns of the marriage.
Tracing wasted assets
In high-asset divorce cases, dissipation usually involves significant, unusual transactions that go far beyond minor purchases. Examples include:
- Improper diversion of business funds for personal use
- Excessive, nonreciprocal gifting to third parties
- Major expenditures on a nonmarital partner, such as real estate or luxury items
- Significant gambling losses or other wasteful, frivolous spending
You must show that the spending was frivolous, destructive or without your consent. It must also be wholly unrelated to maintaining the family unit.
What counts as proof?
A simple claim that funds were wasted holds no weight in an Indiana court. You must have precise financial evidence for the court to intervene. Proving dissipation requires detailed forensic accounting and investigative work. You may need to subpoena and analyze years of financial records, including:
- Bank statements
- Credit card records
- Brokerage reports
- Business financial ledgers
Divorce attorneys often bring in forensic certified public accountants (CPAs) to trace the flow of money. CPAs diligently work to identify the exact date and nonmarital purpose of the expenditure, and to quantify the amount dissipated.
Once you prove the amount, the court will typically offset the division of property by assigning the dissipated funds to the other spouse’s share of the marital estate, thereby ensuring the non-dissipating spouse receives an equitable (often larger) share of the remaining assets to compensate for the loss.
Protect your financial future
Dissipation claims are profoundly complex and depend entirely on the quality and presentation of your financial evidence. Successfully tracing assets and presenting this evidence requires experienced legal representation by lawyers skilled in high-asset dissolutions. If you suspect your spouse of dissipating marital funds, acting quickly is critical to preserving the necessary documentation before it can be destroyed or concealed.