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Dissipation
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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.
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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.
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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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