In this Learn About Law podcast & videoblog, attorney Kevin O'Flaherty of O'Flaherty Law discusses what dissipation and contribution are and how they are involved in the way martial assets are distributed. If you spend money in a marital estate on extraneous things, it is described as dissipation. If you offer assets from your personal assets into the martial estate, these may be considered for contribution. We discuss plenty of examples and ways the court determines dissipation and contribution.
In this article...

The most challenging and time consuming portion of any divorce proceeding, is sorting through the finances.  Dissipation and contribution are often an overlooked component when analyzing marital finances because both concepts deal with money that has already been spent. The key difference between the two (2) concepts lies in how the money was spent.  

Dissipation                

 When one spouse uses marital resources for non-marital purposes, it is likely they have “dissipated” the marital estate. If a dissipation has occurred, then the spouse who has caused the dissipation must reimburse the marital estate for this improper expenditure. Examples of typical dissipation are:

The most challenging and time consuming portion of any divorce proceeding, is sorting through the finances.  Dissipation and contribution are often an overlooked component when analyzing marital finances because both concepts deal with money that has already been spent. The key difference between the two (2) concepts lies in how the money was spent.  

What is Dissipation in Divorce?   

When one spouse uses marital resources for non-marital purposes, it is likely they have “dissipated” the marital estate. If a dissipation has occurred, then the spouse who has caused the dissipation must reimburse the marital estate for this improper expenditure. Examples of typical dissipation are:

  • Buying a giant flat screen television;
  • A golfing trip by one party  that excludes the other party;
  • Purchasing a fishing boat when only one spouse fishes;
  • Lavish spending sprees on jewelry or sports cars;
  • Gambling

Examples of things unlikely to be considered dissipation:

  • Purchase of an insurance policy;
  • Investing money in a mutual fund;
  • Purchasing a new air conditioner
  • Payment of medical bills

What is Contribution in Divorce?    

A contribution, on the other hand, occurs when one spouse uses non-marital funds to contribute to a marital expense. When a contribution has occurred then the contributing party is entitled to reimbursement from the marital estate. Examples of typical contributions are:

  • Using proceeds from the sale of non-marital property towards the purchase of a new jointly owned marital residence;
  • Using proceeds from a baseball  card collection, held since childhood, to purchase a new roof for the marital residence;

The key fact to differentiate dissipation from contribution is: when a dissipation has occurred the dissipating spouse owes the marital estate money; when a contribution has occurred the marital estate owes the contributing spouse money.  If you suspect a dissipation has occurred, or you feel you are entitled to reimbursement from a contribution you made to the marital estate, you should contact an attorney for advice.

Posted 
November 16, 2020
 in 
Text Link
 category

What to Expect From a Consultation

The purpose of a free consultation is to determine whether our firm is a good fit for your legal needs. Although we often discuss expected results and costs, our attorneys do not give legal advice unless and until you choose to retain us. Although most consultations are complimentary, some may carry a charge depending on the type of matter and meeting location.

Similar Articles

Heading

Learn about Law
Indiana
Illinois
Iowa