May 10, 2011
A perennially recurring issue in divorce cases is dissipation of marital property. Dissipation occurs when marital property is spent or otherwise lost, in anticipation of divorce, for a nonmarital purpose.
A nonmarital purpose is normally a purpose which benefits only one of the parties. Expenditures within the accustomed marital standard of living are generally not dissipation, however, even if only one spouse benefits, as all married persons normally spend some marital property for their own sole benefit. For example, each spouse will use marital funds to purchase clothing which only he or she wears. A nonmarital purpose must therefore both (1) lie outside the normal marital standard of living, and (2) benefit only the spending spouse. See generally 1 Brett R. Turner, Equitable Distribution of Property ' 6:107 (3d ed. 2005 & Supp. 2010).
Because normal living expenses do not meet the first requirement, funds used to pay those expenses are normally not dissipated, even if they are spent after separation. See, e.g., Howcroft v. Howcroft, 2010‑Ohio‑6410, 2010 WL 5545395 (Dec. 10, 2010) (credit card debt incurred by wife to pay living expenses during separation was not dissipation, where husband had not been ordered to pay temporary support); Karimi v. Karimi, 867 So. 2d 471, 475 (Fla. Dist. Ct. App. 2004) ("Where the asset is used by one of the parties out of necessity for reasonable living expenses, however, that asset should not be assigned to the party who used [it], absent a finding of misconduct."); Faerber v. Faerber, 13 So. 3d 853, 862 (& 34) (Miss. Ct. App. 2009) ("[O]rdinary and reasonable living expenses used during separation generally do not constitute a dissipation of marital assets.").
But the rule is otherwise when living expenses are excessive. In Shaulson v. Shaulson, 9 A.3d 782 (Conn. App. Ct. 2010), for example, the husband spend $150,000 furnishing a new home for himself. The trial court found dissipation, and the appellate court affirmed. "The record demonstrates that the court specifically found that the defendant's expenditure of $150,000 to furnish his new house was excessive and not in accordance with his previously 'minimalist' furnishings." Id. at 786. The husband argued that he had needed the additional furnishings to provide a home for the children, of whom he had custody 40% of the time. But the court still found the expenditure excessive. Its conclusion was perhaps influenced by the fact that the husband "had expended no less than $250,000, and possibly as high as $485,000, for trips, gifts to his fiancé as well as household furnishings." Id.
Shaulson can be contrasted with In re Marriage of Murphy, 631 N.E.2d 893 (Ill. App. Ct. 1994), which held that funds spent for normal expenses of setting up the husband's postseparation residence were not dissipated. The expenses included purchases of a new television, CD player, and tape deck, none of which were "unduly extravagant." "There is no requirement," the court noted, that "respondent furnish his home entirely with inexpensive furniture and accessories." Id. at 896. The key difference seems to be that the husband in Murphy stayed within the means of the parties and the accustomed marital standard of living, while the husband in Shaulson did not.
For additional cases finding postseparation living expenses to be extravagant, and therefore finding dissipation, see Harbour v. Harbour, 643 N.Y.S.2d 969 (App. Div. 1996) (wife spent $35,985 for a new wardrobe immediately after separation); In re Marriage of Hubbs, 843 N.E.2d 478, 484 (Ill. App. Ct. 2006) ("29-foot boat and a jet ski"; wife had been on the boat only rarely, could not operate it, and "Mark's female companion had been on the boat on a much more regular basis than Peggy"); Ulsaker v. White, 2009 ND 18, & 17, 760 N.W.2d 82, 87 (trips to "New Zealand, Russia, Canada and California"); and Cardinale v. Cardinale, 889 A.2d 210, 221 (R.I. 2006) ("$48,000 on oriental rugs and furnishings").