My Spouse Wiped Out The Account, What Will Happen To My Money?

joint bank account divorce spouseI recently had a client come into my office wanting to get a divorce. Here was my client’s concern. The spouse in question, who apparently knew that a divorce was imminent, wiped out their joint marital account to the tune of $500,000.00. After this discovery coupled with the fact that my client was not informed where the money went, I was asked what will happen?!

Clearly this is a significant issue with respect to equitable distribution. On its face it is hard for a court to equitably distribute an asset that no longer exists when the action is filed. Automatic orders are meaningless as the money is already gone. Rest assured, the Court cannot and will not simply ignore this missing money. The issue for the Court to decide is whether there was any fraudulent intent on behalf of the spouse that took the money. Normally, the Court will not put itself in the position of second guessing every spending decision of the spouse accused of wiping out an account. There are a multitude of reasons a spouse may have when it comes to spending money from a joint account. Granted, in our example, a spouse will be hard pressed to explain how spending $500,000.00 happens in the routine course of daily bills. Where a spouse cannot provide an adequate explanation for what happened to the marital funds which disappeared on the eve of filing a divorce action, the Court will bestow an award based on the missing asset. Or in other words, my client needs not worry. The Court will equitable distribute the $500,000.00. This may come as credit to other assets, or an outright money award.

Rarely are cases so cut and dry. Here is a more typical example. Wife is a partner in a law firm. On the eve of filing the divorce she is fired from the firm. Husband now seeks to have her partnership evaluated as part of the equitable distribution award. The Court will need to look into the facts and circumstances of the wife’s termination at the firm. If the husband cannot show that the cfamily onduct, the firing, was aimed at depriving him of what would normally be distributed in the due course of the divorce action, the practice will not be valued and distributed.

LEARING POINT: If you realize a divorce is imminent, dissipation of marital assets will not be in your best interest. If your spouse does squander assets you will need to show that it was in an effort to cheat you out of what you’re entitled. Hire an attorney and let them advise you as to how best navigate these issues.

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