Dissipation Revisited

Dissipation Revisited

written by: Rachel Alexander,
by: Rachel Alexander,
Alexander-dissipationrevisited-dplic 188098886 s-2015 Alexander-dissipationrevisited-dplic 188098886 s-2015

July 16, 2018 Divorce, Finance, Mediation Posted By: Rachel Alexander, Esq.

{6:36 minutes to read} Dissipation occurs when one spouse spends marital funds on something that has nothing to do with the marriage. It could be deliberately offshoring funds into a secret bank account in preparation for divorce. It could be spending marital money on a clandestine relationship such as an extra marital relationship.

This last example is the focus of our article. It is a scenario fraught with emotion and difficulty. From my analysis, the trouble comes in when we're trying to address a complex, multidimensional problem with a one dimensional monetary solution. In divorce, dissipation can be addressed by identifying monies spent outside of the marriage and returning them to the marital estate.

Let us take Willa, for example (a fictitious person with an almost fictitious name). During an unhappy time in her marriage, about a year before moving for divorce, she had an affair with another man. She bought a boat for the sole purpose of spending afternoons on the lake with him. In the divorce, it was discovered that she had spent $20,000 on the boat, taken from the joint marital checking account. The husband had never seen the boat much less benefitted from it. The cost of the boat might constitute dissipation, and the wife, Willa, would need to return the $20,000 to the marital estate. In the event she does not literally have the funds at her disposal, it would be offset from another asset or otherwise credited to the husband in equitable distribution.

Here is the rub. $10,000 of those dollars are Willa's to do with as she wants. In general terms, if it has been a long marriage, the marital estate would be subject to equitable distribution at something close to an equal proportion (i.e. 50/50). If the claim is found in the husband's favor and Willa is ordered to make him whole for the extra-marital expenditure, the $20,000 goes back into the marital estate to be divided between both of them. The husband, therefore, is only entitled to $10,000.

While that might help equalize things in a certain way — returning money that was otherwise essentially misappropriated or wrongfully taken from the marriage — it would seem to our fictional husband that he should be returned the full $20,000. Why should Willa have gotten any part of that to enjoy outside of the marriage? Why should he not be entitled to more than just $10,000? Why is there not some kind of penalty because of Willa's "bad act?"

Here is the other rub. There is no legal remedy that neutralizes a betrayal or breach of trust. If something is stolen, and then returned, the victim is still not relieved of the experience of being robbed. There is no adequate legal remedy to heal the human heart. When a return of monies is conflated with anything more than a financial restoration of sorts, there will be no satisfactory resolution.

In divorce, there is no monetary reward for the wronged party. The only clumsy remedy we have for a marriage that has unraveled past repair, is divorce. A good divorce can fairly distribute material assets, but cannot deliver fairness into non-quantifiable matters.

If you do not want to have pain and suffering, do not get married. If you do not want to waste money, do not leave the house. This is sort of the pay to play. When you get divorced, you do not get the marriage you should have gotten. All you get is an end to the very human, flawed marriage that you had.

None of this may be terribly palatable, however, keeping the following in mind may prevent dissipation issues from becoming entirely poisonous: more often than not breaches of trust, including infidelity, do not occur in a vacuum but rather in the chaotic, complicated world. While the direct actions of one party might be "blameworthy," often this viewpoint can only be maintained by looking exclusively at one corner of a very large picture. Though certain acts have been codified into law, most marriages are comprised of a range of actions and reactions, loving, heroic deeds and thousands of blunders and missteps. Most of what occurred does not bare tangible evidence that can be addressed legally or financially. But most often, the fabric of any particular marriage, including its frayed bits, is comprised of the contributions of innumerably hued threads woven by both people into the relationship they made together.

Though blame might feel momentarily vindicating, it provides no sustainable relief or ease. Fueling it is often at the expense of establishing a more comprehensive, balanced narrative. A truer narrative is one that includes room for historical intricacy and respect for the inherent, universal puzzlement of being in relation to one another. When there can be a willingness to share responsibility for what has happened — not bear all of it, but allow for the importance of your inclusion as a participant — a sense of empowerment can return. While this suggestion may seem paradoxical, a shifted perspective can help restore a sense of efficacy, which is particularly needed when broaching difficult consequences and unwanted outcomes.

Rachel Alexander Alexander Mediation Group 119 West Valley Brook Rd Califon, NJ 07830 (908) 832-2305