Your spending habits may be scrutinized during a divorce. Reckless and intentional spending is often known as the dissipation of marital assets, for instance. You might be accused of trying to spend money quickly before the divorce just so that you and your spouse do not have to divide that money in court. If you did this intentionally, just to keep those assets away from your ex, the court may see it as attempted fraud.
You don’t want to face these allegations and you are trying to be transparent. Does this mean you can’t spend money in the lead-up to the divorce? How concerned should you really be?
Changes in spending habits
You certainly can spend money before divorce, and you will have to. Divorce often takes months to complete. If your relationship won’t be over for the next six months while the legal process plays out, you have to make a lot of purchases in the meantime – groceries, gas, utilities, rent, etc.
As such, it’s not spending money that is a problem, but major changes to your spending habits. If you typically spent $3,000 a month and you suddenly started spending $10,000 a month, the court would ask why. This could lead to allegations of dissipation. But if you continued to spend the $3,000 that you were spending before the divorce was finalized, the court knows that these are just your standard financial obligations and there’s no problem with your spending habits.
In some cases, couples will get into disputes about what technically qualifies as asset dissipation and how money should be used during a divorce. If you find yourself in this position, it’s very important for you to know about all the legal options you have.