Under New Jersey divorce law, the trial judge must evaluate several factors before deciding how to equitably distribute the marital assets.
One factor is whether either spouse has “dissipated” any of those marital assets. In a New Jersey divorce, “dissipation” is deemed to occur when one party spends marital assets with the intent of diminishing the other party’s share of the marital assets.
A New Jersey appeals court recently had to consider that issue in a case called Wadhwa v. Sethi. That court began by pointing out that, for many years, New Jersey divorce judges have recognized that there are two competing interests which must be reconciled in order to make that determination.
On one hand, when one party involved in a New Jersey divorce spends marital funds extravagantly, or merely for his or her own benefit, that obviously diminishes the amount of available assets. At the same time, however, until such time as the parties are thinking about a divorce, they ought to be able to spend their money for their own enjoyment.
Whenever one spouse claims that the other spouse dissipated marital assets, a New Jersey divorce court should look at: (1) how near to the parties’ separation the expenditure took place; (2) whether the expenditure was typical of expenditures made by the parties prior to the breakdown of the marriage, (3) whether the expenditure benefited both spouses, or just one of them; and (4) the need for and amount of the expenditure.
In Wadhwa v. Sethi, the trial judge found that in the last 5 years of the parties’ marriage prior to their separation, the husband had dissipated $355,350. The appeals court, however, sent the case back to the trial judge to clarify her written Opinion, because it did not contain an adequate explanation and appears to include a double counting of funds favoring the wife.
Salvaggio Law Group LLC devotes its entire practice to New Jersey Divorce and Family Law matters, including issues relating to equitable distribution.
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