How Is the Dissipation of Assets Handled in a Michigan Divorce?

 Posted on February 21, 2020 in Divorce

The end of a marriage can be difficult on many levels. The breakdown of a relationship can affect more than just spouses. If a couple had children together, they will likely be devastated to see their family unit split apart. In addition, breaking up can cause financial hardship for one or both parties. Michigan, like many other states, is an “equitable distribution” state when it comes to dividing assets or property in a divorce. This means any marital property will be divided in a fair way, but not necessarily 50/50. In some cases, one spouse may have made secret purchases with marital assets. The legal term for this deception is “dissipation of assets,” and an experienced divorce attorney can help discover it. 

Uncovering Hidden Expenditures

Dissipation is defined as spending marital money, or using any marital asset, for something that benefits only one spouse, not the marriage as a whole. Since funds are leaving the marital estate, the combined value of the assets being divided in the divorce settlement will be lower. Examples of dissipation can be gambling, drug or alcohol abuse, money spent on an extramarital affair, or any extravagant purchases made by one spouse.

It may be challenging to prove the dissipation of assets, but that is where a skilled attorney, as well as a forensic accountant, can help. They know where to look and how to reveal dissipated assets. Carefully reviewing financial records and documentation is essential in providing evidence that one party was siphoning off money for him or herself. In certain situations, one spouse could be guilty of filtering money or expenses through a business that they own.

A forensic accountant can assist an attorney by doing the following:

• Identifying suspicious transactions for personal or business expenses
  
• Analyzing business discrepancies to see if they are being done on purpose to decrease the value
  
• Reviewing tax returns to reveal fraudulent or ambiguous write-offs
  
• Uncovering private/separate bank accounts
  
• Monitoring credit card statements
  

Equitable Distribution

After the dissipation has been discovered, the guilty party will likely receive fewer assets in the final divorce settlement. For example, the victimized spouse may get the marital home as compensation for losing out on a significant portion of the marital funds. Or, he or she may receive more of the couple’s monetary savings. Essentially, the divorce court has the discretion to distribute assets to the injured spouse that equal the amount that was dissipated. 

Typically, any marital debt is also divided in a Michigan divorce. However, when it is revealed that one spouse acquired a substantial credit card debt to maintain an illicit activity, the dishonest spouse is solely responsible for the debt.  

Contact a Novi, MI, Divorce Attorney

Getting a divorce can put a financial strain on one or both spouses, especially if children are involved. If one spouse is hiding assets or expenditures, this can affect the distribution of property once the dissolution of marriage is final. At Elkouri Heath, PLC, we provide skilled legal representation for our clients to achieve the best possible outcomes. Our dedicated Oakland County asset division lawyers will fight for your rights to your marital property to ensure you receive a fair settlement. Call our office today at 248-344-9700 to schedule your free consultation.

Source:

http://www.legislature.mi.gov/documents/mcl/pdf/mcl-chap552.pdf