Proper Use of Marital Funds During Divorce

Going through a divorce is a time of uncertainty and instability. A big part of this is that divorce is one of the most financially unstable times for almost every couple. Dividing finances and making sure there are enough resources to cover to households can stretch many budgets to the limit. Although many people have some money put away in savings or investments, all money that was acquired during the marriage is usually marital property and subject to division at the final hearing of divorce. Many divorce litigants may need to dip into those marital assets in order to keep their expenses met during a divorce. If a party squanders marital assets during the divorce, a court may rule that the party has intentionally dissipated marital assets, leading to a smaller share of assets awarded to that party during the equitable division of property completed at a divorce trial. There are some issues to consider when deciding what is a proper use of marital funds during a divorce. Now might not be the time to plan an expensive vacation or go on a shopping spree.

When deciding whether certain expenditures were proper use of marital funds or instead a dissipation of marital assets, the court will look at several different factors. A very important factor is how the couple spent money during the marriage. It is this factor that demonstrates that normal and typical expenditures such as mortgage payments, business expenses, and groceries are all proper use of marital funds. The court will also examine whether the expenditure benefited both spouses or only one spouse, so even if you and your spouse typically used marital funds for clothes shopping, going on an uncharacteristically large shopping spree for new shoes may not be considered a proper use of the marital funds. The court will also examine the need for the expenditure and the amount. The court will not get bogged down by considering every small purchase, even if it is slightly out of character for habitual spending during the marriage. However, spending a large amount for a lavish vacation may very well be considered dissipation of assets. In general, keeping your spending in line with the same spending habits you used during the marriage is a good rule of thumb to make sure that your expenditures are considered proper use of marital funds by the court.

If you have questions about your rights and responsibilities with regard to marital funds, contact us today. to you about marital property and how to get your future on track.

About the Author


John Nachlinger is a co-founder and managing attorney of Netsquire, a family law firm focused on streamlining divorces through effective mediation, settlement drafting, and court filing assistance. As a New Jersey Supreme Court Certified Matrimonial Law Attorney and Qualified Mediator, John guides couples toward equitable agreements without the cost and stress of litigation.

Recognized as a New Jersey Super Lawyer for over a decade, John’s client-focused approach aims to foster understanding during challenging transitions. With a background spanning top law journals, judicial clerkships, and boutique family law firms, John now applies his analytical skills to create workable solutions for all parties. His mediation services reshape the divorce journey by prioritizing compassion and compromise.

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