In last week’s blog post, we identified and examined what is considered wasteful dissipation. We made the important distinction between positive action taken to dissipate assets (example: gambling with marital assets) and inaction (example: failure to reasonably manage investments). We also identified a non-exhaustive list of eleven (11) factors the court can consider in determining whether wasteful dissipation has occurred. In this week’s post, we consider the effect of a finding of wasteful dissipation on equitable distribution and maintenance
Wasteful Dissipation and Equitable Distribution
Although whether a party wastefully dissipated marital assets is only one (1) factor a court must consider, courts have frequently reduced a party’s share of marital assets due to their wasteful dissipation. Below are summaries of cases from various appellate departments and trial courts explaining the effect of wasteful dissipation on the distribution of assets.
Unequal Division of Debt and Furnishings:
In a 2010 case, a husband was apportioned all debt associated with his businesses and was not entitled to an equitable share of the marital home furnishings as a consequence of his wasteful dissipation of marital assets.[i] In this case, the husband engaged in excessive spending, made various unsecured loans without his wife’s knowledge, and invested in two (2) businesses that resulted in no economic benefit for the parties.
Unequal Division of Marital Residence:
In a 2015 case, the court found that the equity in the marital residence should be disproportionately distributed because the plaintiff proved that the defendant committed wasteful dissipation of marital assets by financially supporting a second family.[ii] The husband conceded that he used his income earned during the marriage to support his second family by paying his paramour’s rent, cable television bill and other expenses for many years. In the end, the wife received, among other awards, sole and exclusive title and possession to the marital residence and 100% of the equity because of the husband’s wasteful dissipation.
Unequal Division of Marital Assets (60% / 40%):
Similarly, a court upheld an award of 60% of certain marital assets to the wife and 40% of certain marital assets to the husband, where the husband wastefully dissipated assets.[iii] The record showed that at the date of commencement of the matrimonial case, the marital assets, excluding the value of the marital residence, totaled $251,818.11 and by the time of trial, this sum was diminished to $208,995.02. The reduction was due mostly to the husband’s refusal to obtain employment during the two (2) years before trial and his withdrawal of large sums of money for his expenses.
These cases illustrate how a court can use its discretion to limit a spouse’s share of marital assets when he or she engages in behavior that prevents the court from making a fair and equitable distribution of certain assets.
Wasteful Dissipation and Maintenance Awards
Similarly, a party’s wasteful dissipation of assets may also affect an award of maintenance. The theory is that a dependent spouse (the spouse to receive the maintenance award) should not suffer because the other spouse wasted marital property rendering him or her less capable of paying maintenance. Appellate Courts have modified maintenance awards after taking into consideration the payor’s wasteful dissipation of marital assets. For instance, a case from the Third Department modified a lower court’s holding that plaintiff was not entitled to maintenance.[iv] The Third Department modified the award to $25 per week after taking into consideration, amongst other things, the payor’s wasteful dissipation of marital assets.
In a Kings County decision authored by the Honorable Jeffrey S. Sunshine, the court held that the husband, who purposefully concealed his unemployment from the wife for more than seven (7) years, was not entitled to the presumptive amount of pendente lite maintenance because such conduct constituted wasteful dissipation. The presumptive amount of pendente lite support was $3,612.47; reduced by the husband’s fifty percent (50%) share of the daily living expenses paid by the wife, for a total of $674.47 per month. However, due to the husband’s wasteful dissipation, the court awarded him $400.00 per month in pendente lite support instead.
Every matrimonial matter is fact specific with its own unique history and circumstances. For this reason, the material in this blog is only meant to provide general information and is not a substitute nor is it legal advice to you. Readers of this article should seek specific legal advice from legal counsel of their choice. In the event that you need legal assistance, please contact Marissa Pullano at email@example.com or (516) 393-8297 or Samantha Guido at firstname.lastname@example.org or (516) 393-8250.
[i] Noble v. Noble, 78 A.D.3d 1386 (3d Dep’t 2010).
[ii] G.M. v. M.M., 50 Misc. 3d 956 (Sup. Ct. Westchester Cty. 2015).
[iii] Southwick v. Southwick, 202 A.D.2d 996 (4th Dep’t 1994).
[iv] Reed v. Reed, 93 A.D.2d 105 (3d Dep’t 1983).