Can assets bought during the marriage be sold to pay for a lawyer?
Should you sell your assets you had during the marriage to pay for a qualified lawyer? Enough former spouses have made this mistake to call up a name for this law called “Dissipation of Marital Assets.” It is an expensive mistake that could wind up going against you in the divorce court system. While the court legally has no jurisdiction over your property until after you or your spouse files the divorce papers, it doesn’t mean you can do anything you want with marital property.
How the Courts Proceed
The judge will look back on the past actions of a period that led up to the divorce filing, and he can rule on when the court has jurisdiction over the proceedings. The courts might look at the actions taken as, “in contemplation” of divorce. Even if you didn’t have ulterior motives, transfer of property so that your former spouse doesn’t receive it has consequences. In fact, the New York court system holds a strongly negative view of this behavior, and the court can impose a penalty on those who have engaged in it. If you’re the victim of it, you can protect yourself from it. Before a court does this, however, they will do a few things:
- Look at if the asset has been truly lost.
- The offending party had charge over the asset when they lost it.
- The loss had no malicious purpose in relation to the marriage.
- At what point in time the asset was lost.
In general, this is a universal law, and judges will usually frown upon it, even if the property is held in your name. You have to proceed with great caution.
How Property Division Works
At the time of your divorce, both you and your spouse have a legal right to all the property acquired during the marriage. If you give it away or sell it without the knowing approval of your spouse, the judge will tweak how all future marital property gets divided to compensate for the loss in the asset. Even if you sold the property to pay for a better lawyer, the handicap it places on you isn’t worth it. let’s say you sold an acre of land for $30,000, and you have the cash sitting in your savings account. The judge can issue an order to give $15,000 to your spouse. If you can’t account for the money, the judge will keep this in mind when he divides the marital property. He’ll add the $30,000 onto the spouse’s column as a means of balancing out the loss. If no other assets are available, the judge can ask you to make cash payments to the spouse. Some of the things that might be deemed “Wasteful Dissipation” include:
- Frivolous or excessive shopping.
- Spending for extramarital affairs.
- Selling something for much less than its value.
- An over amount of gambling in a set period.
These laws exist to keep both marital parties protected. Unfortunately, divorces can sometimes become a nasty business. It’s better not to do anything with what can be deemed marital property if you don’t want the court system to look on you unfavorably. You could be digging yourself an even deeper hole to crawl out from.