Clients often express concern over the manner in which their soon to be ex-spouse expended marital funds during the course of their marriage, and ultimately inquire as to whether the court will consider the dissipation of assets when dividing the marital estate. The Connecticut Supreme Court addressed this very issue in Gershman v. Gershman, 286 Conn. 341 (2007).
In Gershman, the parties were married for approximately twenty years and were the parents of three minor children. With respect to the wife’s claim that the husband dissipated assets, the lower court found that in 2002, the husband invested $105,000 in a series of partnerships, which at the time of trial were only valued at $31,074. The court further found that during the marriage, the parties agreed to spend approximately $500,000 to build a new home; however, unbeknownst to the wife, the husband ended up spending well over $900,000.
In entering its orders, the trial court explained that the defendant had made a bad investment decision with respect to the aforementioned partnerships and that he was responsible for the cost overruns for the parties’ new home, causing them to lose $200,000 when it was sold. The court ultimately stated that, “The matter of the dissipation of family assets ha[d] been taken into consideration in the overall asset division.”
The husband appealed, claiming that the trial court improperly concluded that he had dissipated family assets. In reviewing the law of several other jurisdictions, the Connecticut Supreme Court explained that a poor investment decision or the use of marital assets to purchase marital property alone does not constitute dissipation. Rather, courts generally require that a marital asset be used for a non-marital purpose. Some courts have concluded that dissipation only occurs where a spouse acts in bad faith with an intent to deprive the other spouse of marital assets.
In such cases, there must be some evidence of willful misconduct, bad faith, or an intention to dissipate marital assets before a court may alter the equitable distribution award. Taking those general concepts into consideration, and ultimately ruling in the husband’s favor, the Connecticut Supreme Court concluded that, “at a minimum, dissipation in the marital dissolution context requires financial misconduct involving marital assets, such as intentional waste or a selfish financial impropriety, coupled with a purpose unrelated to the marriage.” Gershman at 351.
By: Joseph Maya, Esq.
Should you have any questions regarding the dissipation of marital assets, or divorce matters generally, please feel free to contact Attorney Joseph Maya He can be reached in the firm’s Westport office at (203) 221-3100 or by e-mail at email@example.com.
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