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Can My Estranged Spouse Clean Out Our Joint Accounts?

Question: So you said in a prior Blog post that my estranged spouse can clean out our joint accounts.  Not fair!  Is there anything I can do about it? Answer: Of course there is, assuming you can prove that dissipation has occurred. At the time of the absolute divorce trial, Maryland case law has held that the court may treat property found to be “dissipated” as “extant,” i.e. still in existence. See Karmand v. Karmand, 145 Md. App. 317, 345, 802 A.2d 1106 (2002); Jeffcoat v. Jeffcoat, 102 Md. App. 301, 311, 649 A.2d 1137 (1994).  Therefore, in determining the disposition of marital property, the court may include the dissipated property in the analysis as though no dissipation had occurred. “Ordinarily, property disposed of before trial cannot be marital property.” Collins v. Collins, 144 Md. App. 395, 412, 798 A.2d 1155 (2002).  However, “[d]issipation may be found where one spouse uses marital property for his or her own benefit for a purpose unrelated to the marriage at a time where the marriage is undergoing an irreconcilable breakdown.” McCleary v. McCleary, 150 Md. App. 448, 462-3, 882 A.2d 460 (2002). Courts have “defined dissipation as expending marital assets ‘for the principal purpose of reducing the funds available for equitable distribution.’” McCleary, 150 Md. App. at 463, 882 A.2d 460 (citing Jeffcoat v. Jeffcoat, 102 Md. App. 301, 311, 649 A.2d 1137 (1994)); see Turner v. Turner, 147 Md. App. 350, 411, 809 A.2d 18 (2002)(discussing a spouse’s use of a withdrawal of joint funds for living expenses or taxes as not being dissipation); Wassif v. Wassif, 77 Md. App. 750, 762, 551 A.2d 935 (1989)(payment of joint obligations of the parties, i.e. real estate taxes on the marital home, held not to be dissipation); Green v. Green, 64 Md. App. 122, 139, 494 A.2d 721 (1985)(payment of child support and alimony from funds withdrawn from a joint account held not to be dissipation); Allison v. Allison, 160 Md. App. 331, 339-340, 864 A.2d 191 (2004)(holding that when “a spouse uses marital property to pay his or her own reasonable attorney’s fees, such expenditures do not constitute dissipation of marital assets”).  Appellate courts in other states have held that improper expenditures on a paramour, or on gambling, constitutes dissipation even though the guilty spouse had no intention to reduce the amount of funds that would be available for equitable distribution at the time of the divorce. See, e.g., Brosick v. Brosick, 974 S.W.2d 498 (Ky.Ct.App.1998) (gifts to paramour); In re Marriage of Bartley, 712 N.E.2d 537 (Ind.Ct.App.1999) (excessive losses in betting pools on NCAA and NASCAR events). Notice that this determination is made “at the time of trial,” which could be twelve months or more from the time of filing the case.  Generally, unless temporary or interim injunctive relief is awarded by the court to freeze assets (which is unlikely), the pretrial financial activities of the spouses with regard to their joint or respective assets are of no concern to the court until the time of the absolute divorce trial. What’s the lesson here: read my prior post and protect your assets. If you have any questions, please contact Alex Allman at: Divorce in Maryland aallman@offitkurman.com | 410.209.6438 Alex Allman focuses his practice in the areas of family law and civil litigation. Mr. Allman has been involved in handling all aspects of domestic or family law cases, including divorce, property distribution, child custody, child support and alimony, as well as a broad range of complex commercial and civil litigation. You can also connect with Offit Kurman via Facebook, Twitter, Google+, YouTube, and LinkedIn.