Your spouse claims that a family member or friend is struggling financially and lends them a significant amount of money. This is a generous gesture, but it could raise questions if you are facing a divorce.
Transferring and hiding assets is a significant issue in divorces. Spouses may try to hide assets for many reasons, whether they think they are protecting their property or getting back at their former partner. This can be a complex – and highly sensitive – matter. So, here are a few things you should consider.
What does it mean to dissipate assets or money?
Dissipating marital assets is when one spouse “wastes” or hides marital finances or assets to avoid a fair distribution of property. This can take many forms, including:
- Suddenly reporting a lower income
- Accruing new debts
- Transferring money to other people or new accounts
- Purchasing big-ticket items and other frivolous spending
Significant money transfers are a common way that spouses try to hide finances. They transfer money to a friend or someone they trust before the divorce, so it is not a part of the marital assets they are later required to divide. Then after the divorce, they reclaim these assets.
So, is a loan dissipating assets?
Simply loaning money is not automatically dissipating assets. However, there are a few questions you should ask yourself, including:
- Did your spouse discuss the matter with you or obtain your consent before transferring the money?
- How much money was transferred?
- What is your spouse’s relationship with this person, and what is your relationship with them?
For example, if your spouse did not discuss the issue with you before transferring a substantial amount of money out of a joint bank account, your better investigate. Doing so can be key to protect your assets as well as your own financial future.