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Dissipation of marital assets: What can you do when your spouse is wasting assets during a divorce?

Dissipation of marital assets: What can you do when your spouse is wasting assets during a divorce?
Axelrod & Associates, P.A.

What happens when your spouse “dissipates,” hides, or wastes marital assets before a divorce?

When a couple is separated and headed for divorce, they often find that they no longer trust their former partner – sometimes with good reason. All marital assets must be equitably divided by the family court (or by agreement between the parties), but there are, unfortunately, situations where one spouse will actively spend, hide, or even destroy assets to prevent their husband or wife from taking a share…

In this article, we will discuss “dissipation of marital assets,” including:

  • What dissipation of marital assets means,
  • How the family court handles situations where one spouse is hiding or wasting marital assets,
  • How to protect yourself from a spouse who is hiding or wasting marital assets, and
  • How to protect yourself against allegations of dissipation of marital assets.


Dissipation of marital assets is when one spouse controls marital assets that are subject to equitable division, and they waste or dispose of those assets intentionally to prevent their spouse from taking a share.

Dissipation involves more than just bad business decisions or poor management of funds – it is the deliberate dissipation of funds that may involve:

  • Frivolous or unjustifiable spending,
  • Expensive gifts for a girlfriend/boyfriend, children, or other family members,
  • Spending sprees that empty the bank account or max out credit cards,
  • Hidden purchases or transfers of funds to undisclosed accounts, or
  • Deliberate destruction of a personal business, assets, or other sources of income.

The Marital Estate as of the Date of Filing

SC Code § 20-3-630 says that marital property “means all real and personal property which has been acquired by the parties during the marriage and which is owned as of the date of filing or commencement of marital litigation,” with some exceptions.

If one spouse owns a business, for example, that business and the income derived from it are “marital property” that may be subject to equitable division by the court, and the intentional destruction of the business or diversion of the proceeds from the business will likely be considered dissipation of marital property.

What Does the Family Court Do When a Spouse Dissipates Marital Assets?

If your attorney proves to the court that your spouse has intentionally dissipated marital assets, the court should assign a value to the dissipated assets, add them to the marital estate, and then equitably divide the marital assets taking into consideration the spouse’s misconduct.

The family court may also award attorney fees to you for the expense of having your attorney track down the assets or transfers that your spouse was attempting to conceal…

For example, in Dixon v. Dixon, the SC Court of Appeals held that it was appropriate to add the full value of the husband’s business ($339,306) to the marital estate and then reduce the husband’s share by the business’s full value where there was clear evidence that the husband had intentionally destroyed the business after the divorce action was filed.

The Court noted that, if the business was still operating at the time of the final hearing, it probably would have been awarded solely to the husband because of his wife’s minimal involvement in the business, but found that “upon a finding of dissipation, the court must distribute the property in question – and enter judgment accordingly – whether or not the asset still exists.”

The Court recognized that their decision would “work a severe financial hardship on the Husband,” but that it was “a hardship entirely of the Husband’s own making,” and to do anything else would reward the husband, at the wife’s expense, for the husband’s wrongdoing.


How can you protect yourself from dissipation of assets by a vindictive spouse?

  • Be familiar with your assets, income, debts, and expenses – whether they are in your name or your spouse’s name,
  • Ensure that you have full access to your and your spouse’s financial documents like tax returns, bank statements, or credit card statements,
  • Do not sign any financial documents – including a joint tax return – without carefully reviewing them first to ensure they are accurate, and
  • Be on the lookout for red flags/ warning signs like mail or financial statements that no longer arrive in the mail, secretive or defensive behavior by your spouse, unexplained loans or payments to friends or family members, or an unexplained decrease in your spouse’s income.

Protect Yourself from Allegations of Dissipation of Marital Assets

If you are concerned about keeping your financial activities above board to avoid any allegations of dissipation of marital assets, be open and as transparent as possible. If you’ve got nothing to hide, show your spouse and their attorney that you’ve got nothing to hide by:

  • Giving your spouse or their attorney access to the family’s financial records like tax returns, credit card statements, and business records,
  • Voluntarily disclosing your financial information including your business records, and
  • Preparing yourself to answer questions about your bookkeeping, business records, and any unusual purchases or withdrawals that you have made.

If you are defensive, delay in disclosing your records, or otherwise appear uncooperative, your spouse and their attorney may assume you are trying to hide something.


If you are considering separation or divorce, contact your SC divorce attorney immediately. Your divorce lawyer on the Axelrod team will help you to determine what is marital and non-marital property, negotiate with your spouse whenever possible, fight for your property and financial security when an agreement cannot be reached, and seek a protective order when appropriate to protect your marital assets from dissipation.

Call Axelrod and Associates now at 843-916-9300 or send us a message through our website to find out how we can help.

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