For high-net-worth individuals, divorce is about more than dividing assets—it is about protecting a lifetime of wealth. One issue that often arises in complex New York divorce cases is the dissipation of marital assets, where one spouse intentionally wastes, conceals, or improperly transfers marital property before or during the divorce.
At The Meyers Law Group, P.C., we frequently represent business owners, executives, physicians, professionals, and individuals with substantial assets throughout Long Island and New York who suspect that a spouse has attempted to reduce the marital estate before equitable distribution.
What Is Dissipation of Marital Assets?
Dissipation occurs when a spouse uses marital funds for purposes that do not benefit the marriage and are intended to diminish the value of the marital estate. These actions often occur after the marriage has broken down or when divorce is anticipated.
Examples of dissipation include:
- Excessive gambling losses
- Spending substantial marital funds on an extramarital relationship, including gifts, travel, luxury accommodations, or financial support
- Transferring money or valuable property to relatives or friends for less than fair market value
- Selling businesses, investments, or real estate below their true value
- Making unusual cash withdrawals or moving assets into undisclosed accounts
- Purchasing cryptocurrency or other investments with the intent of concealing assets
- Destroying or intentionally reducing the value of marital property
In high-asset divorces, dissipation can involve millions of dollars hidden through sophisticated financial transactions, requiring extensive forensic accounting and financial tracing.
What Does Not Constitute Dissipation?
Not every expenditure made during a marriage is considered wrongful. New York courts generally recognize that spouses continue to pay ordinary living expenses and marital obligations even while a divorce is pending.
Examples that typically do not constitute dissipation include:
- Reasonable household expenses
- Mortgage, tax, and insurance payments
- Ordinary business expenses
- Legitimate investment decisions made in good faith
- Payment of ordinary marital debts
The critical question is whether the spending served a legitimate marital purpose or was intended to deprive the other spouse of his or her equitable share.
How New York Courts Address Dissipation
Under Domestic Relations Law § 236(B)(5), New York courts may consider the wasteful dissipation of marital assets when determining equitable distribution. A spouse who intentionally diminishes the marital estate should not benefit from that misconduct.
If dissipation is established, the court has broad discretion to fashion an equitable remedy. Depending upon the circumstances, the court may:
- Award the innocent spouse a larger percentage of the remaining marital estate;
- Credit the innocent spouse for assets that were improperly spent or transferred;
- Attribute the dissipated funds back to the offending spouse’s side of the equitable distribution calculation; or
- Consider the misconduct as one factor among many when dividing marital property.
In substantial estates, these adjustments can significantly affect the ultimate financial outcome.
Proving Dissipation Requires Financial Investigation
Alleging dissipation is not enough. The spouse asserting the claim must present persuasive financial evidence demonstrating that marital assets were intentionally wasted, concealed, or diverted for non-marital purposes.
Depending on the complexity of the estate, this may require:
- Comprehensive review of bank and brokerage records
- Analysis of business financial statements
- Forensic accounting
- Cryptocurrency tracing
- Examination of tax returns
- Subpoenas to financial institutions and third parties
- Discovery of electronic financial records and hidden accounts
Early investigation is often critical. Financial records can disappear, accounts can be closed, and assets can become increasingly difficult to trace over time.
Protecting Your Wealth in a High-Net-Worth Divorce
When substantial assets are involved, every financial transaction matters. Whether the marital estate includes closely held businesses, investment portfolios, executive compensation, deferred compensation plans, real estate holdings, or digital assets, identifying dissipation early can preserve significant wealth.
At The Meyers Law Group, P.C., we understand that sophisticated financial cases require sophisticated legal strategies. We work with forensic accountants, business valuation experts, and financial professionals to uncover hidden assets, trace improper transfers, and protect our clients’ financial interests throughout the divorce process.
If you believe your spouse has transferred, concealed, or wasted marital assets, obtaining experienced legal counsel as early as possible can make a substantial difference in the outcome of your case.
The Meyers Law Group, P.C. represents clients throughout Long Island, including Suffolk County, Nassau County, and across New York, handling complex, high-net-worth divorce litigation involving businesses, executive compensation, investment portfolios, real estate, retirement assets, and sophisticated financial disputes.