Dissipation of Assets in Colorado Divorce

Protecting Your Rights & Advocating For Your Interests

In a divorce proceeding, the intentional use of an asset for an inequitable or illegal purpose with the intent of depriving a spouse of that same asset is called dissipation. Simply, it is misappropriating an asset to keep it away from a spouse.

It’s not necessarily hiding an asset; it’s getting rid of it.

To be classified as dissipation the spending must be excessive, wasteful, and cannot have been approved or condoned by the other spouse, and it must be done in anticipation of divorce

Many times, a spouse may give away possessions, or sell them at incredibly low prices with the likely intention of reclaiming them after the divorce.

Excessive expenditures on drinking, drugs, and/or gambling may also be examples of dissipation of marital assets.

All forms of dissipated assets may be reclaimed by the other party in court.

To make a dissipation claim in Colorado, a spouse needs to establish that the spending was made during the breakdown of the marriage or that it was spent for non-marital purposes during the marriage and in anticipation of divorce. Once this is proven, it is up to the other spouse to show that they were legitimate expenditures.

If the court believes a spouse did indeed intentionally dissipate assets, it can order an adjustment – in effect, the court can add the value of those assets back into the marital estate and penalize the spouse who dissipated them when determining how property will be divided.

What To Do If You Suspect Your Spouse Is Dissipating Assets

If you have any inkling that your spouse may be – or is planning to – dissipate assets rather than account for their true value, it is vital to tell us as soon as possible. Even if it is only a suspicion. Colorado does offer some protection against dissipation: the Automatic Temporary Injunction (ATI).

An ATI  is an injunction that prevents a party in a divorce matter from dissipating marital assets. When an ATI is in effect, neither party can conceal, encumber, transfer, or dispose of marital property without the other party’s consent or a court order, except in the usual course of business.

In conjunction with an ATI Halligan LLC can also issue interrogatories and request documents, financial releases and schedule depositions to uncover those dissipated assets.