Is Your Spouse Blowing Through Money Before the Divorce? How to Prove Dissipation of Marital Assets in New Jersey

​​You’ve been monitoring the bank accounts. The credit card bills don’t add up. There are charges you don’t recognize, withdrawals you can’t explain, and a growing sense that your spouse is spending down the marital estate on purpose.

If this sounds familiar, you may be dealing with what the law calls dissipation of marital assets — and it’s more common than most people realize.

The good news? New Jersey courts take this seriously. If you can prove your spouse is recklessly or intentionally wasting marital funds, the court can adjust the distribution of assets to make things right.

Here’s how it works and what you need to do to protect yourself.

What Exactly Is Dissipation of Marital Assets

Dissipation refers to the intentional or reckless spending, wasting, or depleting of marital assets by one spouse — typically at a time when the marriage is breaking down or a divorce is imminent.

Under New Jersey’s equitable distribution statute, N.J.S.A. 2A:34-23.1(i), the court must consider each spouse’s contribution to the acquisition, dissipation, preservation, depreciation, or appreciation of the marital property when dividing assets.

This means if your spouse is burning through money, the court has the authority to treat those wasted assets as if they still exist in the marital estate — and award you a larger share of what’s left to compensate.

The New Jersey Supreme Court made this clear in Painter v. Painter, 65 N.J. 196 (1974), cautioning that any disposition of property designed to defraud the other spouse can be the subject of judicial action. And in Kothari v. Kothari, 255 N.J. Super. 500 (App. Div. 1992), the court found dissipation where a husband wired significant marital funds overseas to family members after filing for divorce.

What Dissipation Looks Like in Practice

Dissipation isn’t about your spouse buying an expensive pair of shoes or taking a vacation. It’s about a pattern of spending that’s designed to reduce the value of the marital estate — or spending that is so reckless it has the same effect.

Common examples include gambling away large sums of money, lavish spending on an extramarital partner (dinners, gifts, trips, hotel rooms), making unusually large gifts or transfers to friends or family, running up credit card debt with no benefit to the marriage, deliberately destroying or devaluing marital property, and withdrawing large amounts of cash that can’t be accounted for.

The key distinction is that dissipation involves spending that benefits only one spouse or has no legitimate marital purpose — and it typically happens once the marriage is on the rocks.

The Timing Matters More Than You Think

One of the most important factors in a dissipation claim is when the spending occurred. New Jersey courts focus heavily on the proximity of the expenditure to the breakdown of the marriage.

Spending that happens while the marriage is still functioning normally — even if it’s extravagant — generally won’t be considered dissipation. Your spouse’s expensive hobby or taste for luxury cars during a healthy marriage is unlikely to qualify.

But once the marriage begins to break down, the calculus changes. Courts look at several factors when evaluating dissipation claims. How close was the spending to the separation or filing date? Was this type of spending normal for the couple, or did it represent a dramatic change? Did the spending benefit the marriage or just one spouse? How significant was the amount relative to the couple’s overall finances?

If your spouse suddenly starts spending far beyond their historical patterns right around the time the marriage starts falling apart, that’s a strong indicator of dissipation.

How to Prove Dissipation in a New Jersey Divorce

Here’s the important part: the burden of proof initially falls on you — the spouse alleging dissipation. You need to show the court that the wasteful spending occurred and that it was not consistent with normal marital spending patterns.

However, once you establish a prima facie case of dissipation, the burden shifts to your spouse to show that the money was spent for a legitimate purpose.

Building a strong case takes documentation and, in many cases, professional help.

Gather financial records. Start pulling together bank statements, credit card statements, investment account records, and any other documentation of financial activity. Look for unusual withdrawals, transfers, or charges that don’t line up with your normal spending patterns.

Track cash transactions. Cash is harder to trace, but it’s not invisible. Large ATM withdrawals, cashier’s checks, and wire transfers all leave a trail. If your spouse has been pulling large amounts of cash, document the dates, amounts, and any context you have.

Compare spending patterns. Create a timeline showing how spending changed as the marriage deteriorated. If your spouse averaged $3,000 a month in personal spending and suddenly jumped to $15,000, that pattern tells a compelling story.

Consider hiring a forensic accountant. For complex financial situations, a forensic accountant can trace funds, identify hidden transactions, and present a clear picture of how marital assets were depleted. This professional analysis can be the difference between a successful dissipation claim and one that falls flat.

Document everything. Keep records of conversations, texts, or emails where your spouse discussed or referenced their spending. Screenshots and saved messages can be valuable supporting evidence.

What the Court Can Do About It

If the court determines that dissipation occurred, it has several remedies available.

The most common is adjusting the equitable distribution to compensate the non-wasteful spouse. Essentially, the court treats the dissipated funds as if they still exist in the marital estate and credits the innocent spouse accordingly. So if your spouse blew $50,000, you might receive an additional $25,000 (or more) from the remaining assets to account for your share of what was wasted.

Courts can also reduce the wasteful spouse’s share of other marital assets like the house, retirement accounts, or a family business. In some cases, the court may hold the wasteful spouse fully responsible for debt they racked up during the dissipation.

Dissipation can also factor into alimony and child support calculations, since it speaks to the financial circumstances and behavior of both parties.

How to Protect Yourself Before You Even File

If you suspect your spouse is wasting marital assets, there are steps you can take right now — before anyone files for divorce.

Open your own bank account and start setting aside funds for your own expenses. This isn’t about hiding money — it’s about ensuring you have access to resources during the divorce process.

Request account freezes or restraining orders. Once a divorce complaint is filed, you can ask the court to issue an order preventing either spouse from dissipating, transferring, or hiding marital assets. This is a common protective measure in New Jersey divorces.

Make copies of all financial records. If your spouse controls the finances, get copies of everything you can access — tax returns, pay stubs, bank statements, investment accounts, property records, and business documents. Once the divorce starts, access to this information may become more difficult.

Consult with a divorce attorney early. The sooner you get professional guidance, the better positioned you’ll be to protect the marital estate and build your case.

What Doesn’t Count as Dissipation

It’s worth understanding what courts generally do not consider dissipation, so you can set realistic expectations.

Bad business decisions made during the marriage — even ones that lost money — are typically not dissipation. There’s a difference between intentional waste and poor judgment.

Spending for non-marital purposes while the marriage is still intact usually won’t qualify. If your spouse has always been a big spender, the court may view continued spending as consistent with marital norms.

Normal living expenses during the separation period are also generally not considered dissipation. Your spouse is entitled to maintain a reasonable standard of living while the divorce is pending.

The line is crossed when spending becomes intentionally or recklessly wasteful and occurs in the context of a deteriorating marriage.

Take Action Now to Protect Your Share

Dissipation claims can be powerful tools for protecting your financial interests in a divorce — but they require evidence, timing, and strategy. If you suspect your spouse is spending down the marital estate, don’t wait.

At Netsquire, we help New Jersey couples work through even complex financial situations with clear-eyed mediation and flat-fee legal services designed to keep things fair and efficient. Whether you need guidance on protecting assets or navigating the equitable distribution process, contact our team for a consultation and let’s figure out your next move.