Life does not simply stop between the time you begin your separation period and finalize your divorce. You have to continue working and navigating day-to-day life. During the separation period, it is likely that you and your spouse will experience changes as you get used to separate lives.
However, the details of your finances could change as well. In fact, in some cases spouses might have a hand in these changes, through the dissipation or development of marital assets. What does that mean, exactly?
Compare and contrast these impacts
North Carolina law – and the family law court – evaluates various factors to divide marital property between two divorcing spouses. This list of factors also includes your actions during the separation period, namely:
- Dissipation, which refers to efforts to “waste” assets. A primary example of this could include spending excessively in an effort to decrease the overall value of marital assets. It could also involve destroying assets, as we have discussed in previous blog posts. While dissipation of marital assets might not always be on purpose, it is still a risk.
- Development, on the other hand, would involve actions that increase the value of a marital asset. A common example of this would be a spouse contributing to efforts that increase the value of a business or perhaps even real estate properties that the spouses own.
If either dissipation or development occurs during the separation period, it could impact the division of your marital property. Put simply, these actions can affect the calculation of equitable distribution, based on how an individual dissipated or developed assets.
Keep a close eye on your finances
As noted earlier, one of the requirements to obtain a divorce in North Carolina is to fulfill a separation period of at least one year. Throughout that year, it is important to track your finances. This includes the factors listed above, as well as other internal or external factors, such as the stock market or broader economy.
Regardless of the reasons behind any changes, it is critical to maintain a detailed financial record to monitor fluctuations, prepare for your divorce and keep your financial health secure.