Liquidating assets prior to divorce
With regard to specific law issues, readers of this article should seek specific advice from legal counsel of their choice.
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Generally speaking, if there is no misconduct, the allocation to the offending spouse will likely not occur.
Florida Courts have held that there must be specific evidence and findings that the spending spouse intentionally dissipated assets.
In considering the distribution, the Court must take into consideration a variety of statutory factors. Black’s Law Dictionary defines dissipation as, “ [t]he use of an asset for an illegal or inequitable purpose, such as a spouse’s use of community property for personal benefit when a divorce is imminent.” Florida Courts have defined dissipation of marital assets as being “where one spouse uses marital funds for his or her own benefit and for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.” Gentile v. However, one spouse’s perception that a marital asset was dissipated may not, in and of itself, convince the Court that the asset should be treated as being wasted.The recipient will take legal ownership of the assets when the transfer is complete and then assume sole total responsibility for the tax consequences of any future transactions or distributions.This means that if you are going to give half of your IRA to your soon-to-be-ex-wife in the form of a properly labeled transfer incident, she will have to pay the tax on any distributions she takes out of the account after she receives the funds.To the extent possible, close attention and records should be sufficient to support the preliminary claim, then it is up to you to justify why the expenditures were intentionally wrong and unrelated to the marriage.
The material appearing on this blog is meant to provide general information only and is not a substitute for nor is it legal advice to you.The most important component of prevailing on a dissipation claim is that there is a solid foundation of evidence to support the contention, but equally as important, the Court must make specific findings on the record as to why the unequal distribution occurred.