Getting through the California divorce process is stressful, and most people will deal with the stress in different ways. In some cases, divorce will bring out an ugly side of a person and their selfish or intentionally hurtful behavior can result in long term financial consequences. As Los Angeles divorce lawyers, we are sometimes asked…..What should I do if my spouse is spending money in a reckless manner during our divorce process?
Unfortunately, our divorce attorneys have seen some cases where one spouse decides to spend a large amount of marital assets either right before their divorce is filed, or during the various stages of the divorce. In this type of situation, one spouse typically feels slighted, entitled, or wants revenge.
Therefore, they will excessively spend the money in an attempt to gain an advantage, or to unfairly hurt their soon to be ex-spouse. So, how is this type of situation viewed by a Los Angeles divorce court? Because California is a community property state, each spouse is considered to own all property of the marriage jointly.
This means that each spouse wholly owns the money in a joint bank account. Even if you try to change the account to your own name, assets obtained during the marriage are the equal property of both spouses until a divorce and property distribution order is entered. So, if you are in the process of a messy divorce that has caused pain to both parties, what should you do if your spouse is spending or offloading marital assets?
Reckless Spending During Divorce Proceedings
Unfortunately, reckless spending during California divorce proceedings is not uncommon. Whether the spending is for the purpose of spite or simply a result of coping with stress, there are solutions to stop reckless spending by a spouse in California. The question remains, however, what is considered “reckless” spending or a waste of assets during a marriage or divorce proceeding? There are many common things a vengeful spouse may attempt to buy or pay off by using marital assets, either right before or during the divorce process. These purchases or pay-offs can include:
- New automobile
- Gambling debts
- Money spent on extramarital affairs
- Judicially determined “extreme spending”
- Incurring major business losses
- Significant stock investments; or
- Spending on lavish gifts
These items above are all tangible things that can be tracked pretty easily, and since you have assets to show the court, it's not that typically that difficult to seek some type of recourse in the court. If the purchases or pay-offs are brought to attention of the Los Angeles divorce court, the judge could grant the items to your ex and then grant you assets that are equal to the purchase price of the items.
It's also possible the judge could require the items to be returned or sold and the money from that sale to be divided equally. If spouses disagree on wasteful spending, which they will typically do, the question as to whether the spending spouse needs to make an equalization payment will be left to the court. For example, what if your wife and her sister take a weekend vacation to Cancun shortly after you file for divorce? You may see this as a waste of marital assets, but your wife may argue that it was not a waste to take a weekend away during a stressful season. If the vacation, however, was with your wife's boyfriend, this would be considered reckless spending.
Freezing Assets in California
If you believe your spouse is wasting assets, your Los Angeles family law attorney can petition the court to freeze your marital assets or obtain a non-depletion order. Once your assets are frozen, any non-essential or non-approved spending would be in violation of a court order, and you could hold your spouse in civil contempt of court. Further, under California law, your spouse may be required to make an equalization payment for any wasteful spending. Because both spouses are entitled to split the assets 50/50 in a community property state, the spending spouse would essentially have to make a payment to bring you back to what would have been your equal share before the waste occurred.
Contact a Los Angeles Divorce Lawyer
If you believe your spouse is unlawfully spending your assets, the process of proving such and getting the court to issue an order of protection is complex. Accordingly, it is essential to contact a lawyer to protect your rights. At Furman & Zavatsky LLP, our Los Angeles divorce attorneys have the experienced you need to assist you with the California divorce process. Our lawyers can help you fight against reckless spending. Contact our law firm for a free case evaluation at at 818-528-3471. Serving the greater Los Angeles and San Fernando Valley area.