Financial Assets

Can You Sue Your Ex for Wasting Marital Assets? Understanding Dissipation Claims

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Key Takeaways

It’s not unusual for things to shift once divorce is in motion. But sometimes, those shifts aren’t subtle. Maybe big purchases start popping up. Maybe a joint account balance suddenly drops, and no one gave you a heads-up. In California, that kind of spending, if it’s done to diminish the marital estate, is called dissipation. And it can seriously affect how everything gets divided.

Understanding what counts as dissipation, how the courts handle it, and what you can do if it’s happening to you is an important part of protecting your financial future during divorce. Let’s take a closer look at how this issue plays out under California law.

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What Counts as Dissipation of Marital Assets in California?

California is a community‑property state, so anything earned or acquired from the wedding day to the separation date belongs to both spouses 50‑50. Yet each partner also owes the other a fiduciary duty; a legal obligation to deal with shared money the way a careful trustee would. Spending that breaches that duty can be labeled “waste” or “dissipation.”

Red Flags the Courts Recognize  

  • Lavish personal purchases in the shadow of divorce (e.g., a luxury car bought six months after separation papers are served).
  • Gambling losses or speculative day‑trading that drains retirement accounts.
  • Secret gifts or transfers to friends, family, or a new romantic partner.
  • Mismanagement of separate property; for instance, a spouse who invests a partner’s inheritance in a failing venture without consent.

Courts keep normal bills like rent and groceries off the dissipation list. The question is not how big the bill is, but whether the purchase served a legitimate marital purpose.

Proving a Dissipation Claim

A successful claim of dissipation typically depends on three key elements. First, timing: the waste must occur after the marriage has reached an “irreconcilable difference.” California judges often identify this date by a clear change in behavior, such as opening separate bank accounts, filing for divorce, or moving out.

Second, intent or recklessness: it must be shown that the spending was not a mutual decision and that the spouse knew (or should have known) that the spending harmed the community estate. 

Third, quantifiable loss: evidence like bank statements, credit card ledgers, Venmo screenshots, and brokerage records form the basis of the claim. Expert forensic accountants often get involved to trace the money, uncover hidden assets like crypto wallets, and prepare financial data suitable for court.

How California Courts Repair the Damage

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If the judge finds dissipation, remedies can include:

  • Unequal division: The innocent spouse receives a larger slice of remaining community property.
  • Money judgment: The spender must reimburse the community for the squandered amount, sometimes with interest.
  • Sanctions and fees: California Family Code § 271 lets courts award attorney’s fees to punish conduct that drives up litigation costs. There may also be monetary sanctions available for breach of fiduciary duty under CA Family Code § 1101.

In extreme cases, such as hiding assets offshore or forging signatures, criminal fraud statutes can enter the mix.

When to Involve a Family‑Law Attorney

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The legal line between unfortunate spending habits and compensable breach of fiduciary duty can be thin. Consultation with counsel at the first sign of reckless withdrawals ensures you meet filing deadlines and evidentiary rules. Whiting, Ross, Abel & Campbell has guided many Californians through dissipation disputes, from spouses who depleted joint accounts to partners who funneled cash into secret ventures.

If your ex is emptying accounts or making mystery purchases, don’t wait.

We help you spot the signs of dissipation and fight to protect your financial future. Divorce is hard enough—don’t let unfair spending tip the scales.

We can help

Stop Reckless Spending From Impacting Your Divorce Settlement

Dissipation claims can quickly become complicated. The timing is crucial, emotions run high, and the financial stakes are significant. If your spouse’s spending spree is draining the marital estate, it’s important to start documenting every dollar now.

At Whiting, Ross, Abel & Campbell, we guide clients through each step, from gathering the right evidence to protecting your financial interests during property division. Whether your case settles at the negotiating table or ends up in court, we know how to build a strong position on your behalf.

If you suspect your spouse is wasting marital assets, don’t wait. Reach out to our experienced attorneys today for clear guidance and effective representation.

 

The above is not meant to be legal advice, and every case is different. Feel free to reach out to us at Whiting, Ross, Abel & Campbell, LLP if you have any questions. Information contained in this content and website should not be relied on as legal advice. You should consult an attorney for advice on your specific situation. 

Visiting this site or relying on information gleaned from the site does not create an attorney-client relationship. The content on this website is the property of Whiting, Ross, Abel & Campbell, LLP and may not be used without the written consent thereof.

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Ask Our Expert Attorneys

Dissipation occurs when one spouse uses or wastes community property for a purpose unrelated to the marriage during the period after the marriage has broken down, often to the detriment of the other spouse.

Yes. If you can prove dissipation, the court may order reimbursement or adjust the property division to compensate for the wasted funds.

It must be demonstrated that the spending occurred after the marriage broke down, wasn’t agreed upon, and reduced marital assets. Financial records usually provide the evidence.

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