4 ways a spouse may strategically dissipate marital assets

On Behalf of | Dec 18, 2023 | DIVORCE - Property Division |

Divorce can be a challenging process, especially when it comes to dividing marital assets.

In New Jersey, spouses might employ various strategies to reduce the value of these assets, potentially impacting the final divorce settlement. Understanding these tactics is important for individuals navigating the complex landscape of divorce proceedings.

1. Transferring assets to third parties

One common method spouses use to dissipate assets is by transferring ownership to third parties. This might involve selling assets at a reduced value to friends, family or business associates. By doing so, they decrease the overall value of the marital estate, potentially resulting in a more favorable outcome during asset division.

2. Underreporting income

Another strategy employed by spouses is the underreporting of income. They achieve this by manipulating financial records, inflating business expenses or simply failing to disclose certain income sources. By presenting a lower income, spouses can impact alimony and child support calculations.

3. Concealing assets

Concealing assets is a more direct approach to asset dissipation. Spouses might hide money, investments or valuable possessions, making it challenging for their soon-to-be ex-partner to claim their fair share during the divorce settlement. This tactic requires a careful orchestration of financial activities to keep assets off the radar.

4. Accumulating debt

In some cases, spouses intentionally accumulate debt as a way to dissipate assets. This might involve taking out loans, maxing out credit cards or making substantial purchases on credit. By increasing liabilities, spouses reduce the net value of the marital estate.

Not all relationships last. In 2021, New Jersey had a divorce rate of 2.2 divorces per 1,000 population. For people in the throes of separation, keeping a pulse on assets and watching for signs of dissipation can help ensure a fair and equitable outcome.