Can assets bought during the marriage be sold to pay for a lawyer?

Posted By Max Soni, Uncategorized On October 3, 2017

Should you sell your assets you had during the marriage to pay for a qualified lawyer? Enough former spouses have made this mistake to call up a name for this law called “Dissipation of Marital Assets.” It is an expensive mistake that could wind up going against you in the divorce court system. While the court legally has no jurisdiction over your property until after you or your spouse files the divorce papers, it doesn’t mean you can do anything you want with marital property.

How the Courts Proceed

The judge will look back on the past actions of a period that led up to the divorce filing, and he can rule on when the court has jurisdiction over the proceedings. The courts might look at the actions taken as, “in contemplation” of divorce. Even if you didn’t have ulterior motives, transfer of property so that your former spouse doesn’t receive it has consequences. In fact, the New York court system holds a strongly negative view of this behavior, and the court can impose a penalty on those who have engaged in it. If you’re the victim of it, you can protect yourself from it. Before a court does this, however, they will do a few things:

  • Look at if the asset has been truly lost.
  • The offending party had charge over the asset when they lost it.
  • The loss had no malicious purpose in relation to the marriage.
  • At what point in time the asset was lost.

In general, this is a universal law, and judges will usually frown upon it, even if the property is held in your name. You have to proceed with great caution.

How Property Division Works

At the time of your divorce, both you and your spouse have a legal right to all the property acquired during the marriage. If you give it away or sell it without the knowing approval of your spouse, the judge will tweak how all future marital property gets divided to compensate for the loss in the asset. Even if you sold the property to pay for a better lawyer, the handicap it places on you isn’t worth it. let’s say you sold an acre of land for $30,000, and you have the cash sitting in your savings account. The judge can issue an order to give $15,000 to your spouse. If you can’t account for the money, the judge will keep this in mind when he divides the marital property. He’ll add the $30,000 onto the spouse’s column as a means of balancing out the loss. If no other assets are available, the judge can ask you to make cash payments to the spouse. Some of the things that might be deemed “Wasteful Dissipation” include:

  • Frivolous or excessive shopping.
  • Spending for extramarital affairs.
  • Selling something for much less than its value.
  • An over amount of gambling in a set period.

These laws exist to keep both marital parties protected. Unfortunately, divorces can sometimes become a nasty business. It’s better not to do anything with what can be deemed marital property if you don’t want the court system to look on you unfavorably. You could be digging yourself an even deeper hole to crawl out from.

Divorce always has the potential to be an incredibly expensive proposition. Not only do you face the prospect of losing half of all of your assets and property, but also possibly having to pay child support and alimony. Of course, there are also the legal fees to think about. A good queens county divorce lawyer can help ensure that you get a fair deal and don’t end up giving away too much, but this type of help doesn’t always come cheap.
In fact, many people end up struggling to come up with the funds to pay for a decent divorce lawyer. If this is the case, you may be wondering about whether you can sell off any of your marital assets to help cover the cost of your legal fees. This question is one that comes up all too often and, unfortunately, the answer isn’t always so clear as it depends in large part on where you live. Therefore, it’s important to look into the question in more detail to determine whether you can legally sell off your marital assets while your divorce is pending.

The Question of Dissipation
Selling off joint marital assets during a divorce is a complex and often touchy subject. The problem is that many married couples don’t have their own individual money or assets, which means that it is often necessary for one or both partners to unilaterally spend their joint marital funds in order to hire a divorce lawyer. Similarly, one partner could also decide that it’s necessary to sell off assets or property purchased during the marriage in order to raise the required legal fees.

In legal terms, the question is whether or not the use of marital funds to pay divorce fees constitutes dissipation of assets. The basic definition of dissipation is when, during an irreconcilable breakdown in the marriage, one partner uses marital property or assets for their own benefit unrelated to the marriage. Unfortunately, the law isn’t always so clear as to whether a divorce is related to the marriage.
There are some states and jurisdictions that consider paying for a divorce attorney to be a valid marital purpose. In this case, as long as you can prove that the attorney fees were reasonable and that it was necessary to sell off some of your marital assets to pay these fees, the court is likely to rule that this doesn’t constitute dissipation of assets.

On the other hand, there are also jurisdictions that almost always consider the unilateral use of marital assets to be dissipation. This means that if you use marital funds or sell off any marital assets to pay for your legal fees, the court could determine that you have to repay the full amount of marital funds to your spouse.

Debts Incurred Due to Divorce
The courts have also looked into the question of how to treat any debts incurred by one partner during the divorce proceedings. Specifically, whether any debts incurred for attorney fees should be classified as a marital debt or individual debt. Generally, this question again comes down to whether the local courts consider divorce a valid marital purpose.

Depending on the answer, any debts for legal fees could be considered joint and thus divided amongst the two parties or the court could rule that this constitutes an individual debt and thus is the sole responsibility of the spouse that incurred the debt. However, most courts are in agreement that any fees incurred to hire expert witnesses are the sole responsibility of the partner that hired them.
The question of dissipation is incredibly complicated, and in some cases, it will be up to the sole discretion of a judge to answer this question. Therefore, it is always recommended that you contact a lawyer and discuss your options before deciding to use any marital funds. This way, you can hopefully avoid running into trouble down the road.