This article hopes to explain what you should do if your spouse waste assets during a separation.
While the general rule is that the value of the asset pool for distribution is taken at the date of the separation agreement or hearing, there may be instances where your spouse wastes assets by diminishing the asset pool.
For example, your ex decides to go on a generosity and spending spree and starts selling your properties way under price, purchases assets from a joint bank account that wasn’t disclosed, or starts buying cars for his estranged cousin Bob who hasn’t spoken to in decades.
So what can you do in situations like these?
Well, lucky for the responsible spouse, a.k.a. you, these premature distributions in some cases can be added back into the total value of your asset pool.
Reasonable Living Expenses
Firstly, it is essential to consider whether the distribution of funds was done so to facilitate reasonable living expenses. With all legal terminology, the meaning of “reasonableness” is a long-winded argument that a lawyer will argue out, however, in simple English, it’s basically your necessities such as rent, utilities, groceries and so on.
These reasonably incurred living expenses will not be added back to the asset pool.
In instances where assets are considered wasted, courts have ruled it possible to add back the value of the wasted property.
For example, a legal case saw a situation where the upset spouse went on a reckless spree of diminishing the marital assets which led the court to decide that the behaviour was pretty much unacceptable and the value of the assets were added back to the asset pool.
Given that legal costs can rack up a huge bill, many spouses wonder whether legal costs can be added back into the pool, especially if it’s a hefty sum.
The deciding point is to determine the source of funds used to pay for the legal costs, for example, if the source of funds came from a joint bank account, then legal costs may be added back into the pool.
If the source of funds isn’t from a joint asset, then it’s unlikely that it will be added back into the asset pool.
Sale of Assets
What if you have a vindictive spouse who sells an asset from your asset pool?
Well, if the sale of the asset can be proven, then a judge may discretionarily add the value of it back into the pool.
When it comes to the law dealing with wasted assets in a separation, the best piece of advice to part with is that the Judge has the power to decide whether the asset shall be added back into the pool.
Article provided by Australian Family Lawyers