Recent Case Addresses the Issue of Squandering Marital Assets

Property division is a crucial issue in divorce. Under Missouri law, property and assets acquired during the course of the marriage must be distributed between spouses in a manner that is equitable — meaning fair. However, the process of dividing property can become more complex when one spouse engages in squandering marital assets. A recent case heard by the Missouri Court of Appeals analyzed the issue of squandering when dividing marital property. Applying long-standing precedent, it held that when a spouse accused of dissipation fails to provide a credible accounting, an inference of squandering can be applied.

What is Squandering Marital Assets?

Squandering marital assets is also known as wasteful dissipation. This occurs when one spouse misuses marital property for a reason that has nothing to do with the marriage, or conceals assets in anticipation of divorce. A spouse may have an indication that there has been misuse of marital assets based on the circumstances of the divorce — or if they notice large cash withdrawals or unusual transactions on credit cards.

Common examples of squandering marital assets can include:

• Spending marital assets on gifts or accommodations for paramours
• Reckless spending
• Excessive gambling
• Creating a substantial amount of debt
• Spending excessively on alcohol or drugs
• Transferring marital assets to a third party or family member

Importantly, squandering marital assets is a form of marital misconduct and courts do not take such issues lightly. A spouse who can demonstrate that the other dissipated marital assets may be entitled to request a larger percentage of the marital property that remains. This would allow them to be compensated for the lost assets.

What Happened in the Case Gilbert v. Chrismer-Still?

In the case, Gilbert v. Chrismer-Still, a couple that had been married for five years were divorcing. They owned marital property, including a savings account with deposits that totaled $55,488. Upon commencement of trial, two years after the divorce was initiated, the account only held $26,228. The wife testified that she spent $2,800 when she was required to quickly leave the marital home and the rest were used for unspecified living expenses.

The trial court was not persuaded by the wife’s testimony and valued the savings account in the amount of $55,488. It awarded her the account and ordered her to pay the husband $33,917 so that the marital estate could be divided equitably. The wife appealed the trial court’s decision, arguing that because the husband did not allege any misuse of the funds, the court was incorrect in placing the burden on her to account for the missing assets. She also argued that the evidence did not show that the funds were squandered — only that they were not there.

The Appellate Court’s Decision in the Case

In its analysis, the appellate court noted that Missouri courts have long applied a specific framework, based in case law, to determine whether and how to value and divide marital assets that a spouse claims were squandered. The burden of persuasion lies with the spouse who is arguing that the marital funds were dissipated. The burden then shifts to the spouse accused of squandering to account for the asset in question and present evidence concerning its location or disposition — this is because the spouse who claims the asset was concealed or squandered would typically not know what the other party did with it. Once the spouse accused of dissipation provides the accounting, the trial court can evaluate credibility and evidence to determine whether squandering occurred.

In Gilbert v. Chrismer-Still, the wife argued that while she applied the foregoing framework in her brief, the husband did not adequately raise the issue of squandering marital assets in order to create a burden to provide an accounting. She contended that he only showed a diminution in value without providing evidence that the assets were misused. However, the court found that the showing necessary to prompt an obligation to account for an asset is a relatively low burden since a wrongdoer could refuse to account, or the accounting might not be credible.

As to the wife’s second point, that the evidence only demonstrated that funds were simply no longer in the bank account — rather than squandered — the court found that the evidence and wife’s failure to provide a credible accounting supported the inference that they had been dissipated. Citing the 1990 case, Heins v. Heins, the court noted that squandering can be inferred due to the circumstances surrounding the dissipation of a marital asset.

Contact an Experienced Missouri Divorce and Family Law Attorney

If you believe your spouse has been squandering marital assets during divorce, or you’ve been accused of doing so, it’s best to have a skillful attorney by your side to ensure your marital property is divided fairly. Divorce and family law attorney Mark A. Wortman guides his clients through the divorce process, and ensures that their legal and financial rights are safeguarded every step of the way. Offering knowledgeable representation to clients in the greater Kansas City, Missouri area for divorce matters, including those involving property division, Mark is dedicated to obtaining the best possible outcome for every client.

If you are facing divorce, schedule a confidential consultation to learn how attorney Mark A. Wortman can assist you. Please contact him today online or by calling (816) 523-6100.