Finances and how each spouse handles money can be a constant source of stress in any marriage and may lead to divorce. While one spouse wants to save for retirement or a kids’ college fund, the other spends a family’s money as if it burns a hole in their pocket or purse. This situation may even become more exacerbated after the couple files for divorce.

This type of spending may qualify as the dissipation of assets. More than wasting money, it is defined as using the couple’s joint holdings for inequitable purposes that would only benefit themselves when divorce is imminent.

Common examples

These would apply as long as the behavior was not tolerated or condoned during the marriage:

  • Paying for a gambling addiction
  • Misuse of funds due to drug or alcohol addiction
  • Spending money on a new boyfriend, girlfriend or another third party

An Automatic Temporary Restraining Order can help

It is generally a good idea for couples who plan to divorce to avoid recklessly spending even if it does not qualify as a dissipation of assets. Some other states include an Automatic Temporary Restraining Order (ATRO) in a divorce filing, but the couple can include it themselves. The orders can remain in effect until a final judgment, the petition is dismissed or a new court order takes place.

Because Kentucky is a no-fault state, the actions of a spouse squandering money may have no bearing on the divorce unless the other spouse proves that marital assets or money were squandered throughout the marriage, depleting the asset. In this case, it can lead to an uneven division of assets to compensate for wasted funds.

Protecting assets can be a challenge

The circumstances of each couple’s finances and spending habits are unique. An ATRO can provide peace of mind and may reduce the temptation for reckless spending. This, in turn, leads to greater financial stability during a time of transition for the family.

Dissipation of assets may be challenging to prove, however, so those with concerns about a spouse’s spending before filing or during the divorce process should discuss the matter with their attorney. Together, they can determine the best course of action for addressing the issue.