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 Dissipation

   
Defined as:

“Dissipation may be found where one spouse uses marital property for his or her own benefit for a purpose unrelated to the marriage at a time where the marriage is undergoing an irreconcilable breakdown.” Sharp v. Sharp, 58 Md.App. 386, 401, 473 A.2d 499 (1984). We have defined dissipation as expending marital assets “for the principal purpose of reducing the funds available for equitable distribution.Jeffcoat v. Jeffcoat, 102 Md.App. 301, 311, 649 A.2d 1137 (1994).

Whether the use of marital property to pay attorney's fees constitutes dissipation.

In the case of Allison v. Allison 160 Md.App. 331, 864 A.2d 191 the Court determined: As a policy matter, attorney's fees should generally be viewed as a legitimate expenditure of marital funds. Since the law permits divorce, the law should permit spouses to spend the funds necessary to pay for legal services in divorce proceedings. Divorcing spouses usually do not have their own separate funds to pay their lawyers, so a rule that condemns the use of marital funds for legal services simply does not make sense. The doctrine of dissipation was developed as a tool to prevent and remedy economic misconduct that could frustrate an equitable distribution of partnership assets. Expenditures for legal services cannot be fairly characterized as economic misconduct. On the contrary, it should be viewed as entirely appropriate for people facing marriage breakdown to obtain the legal advice and assistance needed to equitably distribute marital assets.

Furthermore, it wastes resources to require spouses either to seek court permission before spending marital funds to obtain legal assistance or to seek a preliminary award of fees rather than spending the money necessary to obtain counsel. The doctrine of dissipation should remain available, however, to provide an avenue for redress if one spouse spends an unnecessary or unreasonable amount of marital funds on legal fees.

 

 After a party who claims dissipation of marital assets establishes a prima facie case that monies have been dissipated, the burden shifts to the party who spent the money to produce sufficient evidence to show that the expenditures were appropriate. Where the evidence shows that property was intentionally dissipated the dissipated property will be treated as marital property.

  Practice Pointer:

When available have your clients pay your retainer and fees from the pool of marital assets. The net effect upon distribution of marital property is that the opposing party is also footing the bill for your services.

 

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This site was last updated 01/15/08