Dissipation of Assets in Maryland Divorce

When a Spouse Wastes Marital Money

Dissipation occurs when one spouse intentionally spends or destroys marital assets for a non-marital purpose while the marriage is breaking down. It's not about normal spending disagreements — it targets deliberate, self-serving behavior that reduces the marital estate at the other spouse's expense.

Common examples Maryland courts have addressed:

• Spending marital funds on an extramarital relationship — hotel rooms, gifts, trips, restaurant bills
• Gambling away joint savings
• Making large, unilateral purchases with no family benefit — expensive vehicles, luxury items, cryptocurrency speculation
• Transferring marital assets to family members or friends to put them beyond the court's reach
• Running up credit card debt on personal luxuries while the marriage is failing
• Deliberately damaging or destroying marital property

The key timing element: the spending must occur during the breakdown of the marriage, not during a period when the marriage was functioning normally. A $5,000 vacation both spouses took during happier times isn't dissipation. The same amount spent on a solo trip with a new partner while divorce papers are pending almost certainly is.

How the Burden of Proof Works

Maryland uses a burden-shifting framework for dissipation claims:

Step 1: The innocent spouse presents prima facie evidence that marital funds were spent on unusual, non-family expenditures during the breakdown of the marriage. This doesn't require absolute proof — it requires enough evidence to raise a reasonable inference of waste. Credit card statements showing unexplained charges, bank withdrawals with no corresponding family expense, or suspicious transfers to third parties can establish the initial case.

Step 2: Once the prima facie case is made, the burden shifts to the spending spouse. They must prove under oath that the funds were used for a legitimate family or marital purpose. "I don't remember" or "it was just spending money" doesn't satisfy this burden. The spending spouse needs receipts, explanations, and evidence connecting each expenditure to a genuine marital purpose.

Step 3: If the spending spouse can't justify the expenditures, the court finds dissipation occurred.

The Add-Back Remedy

When dissipation is proven, the court doesn't try to recover the spent money. Instead, it treats the dissipated funds as if they still exist in the marital estate — a process called "add-back."

The dissipated amount is added to the spending spouse's column of the marital balance sheet. The court then calculates the equitable distribution as if those funds were still available. The practical effect: the innocent spouse receives a larger share of the remaining tangible assets through an increased monetary award.

Example

The marital estate contains $400,000 in identifiable assets. The court finds that the husband dissipated $60,000 on an extramarital relationship. The court adds $60,000 back to the husband's side, treating the estate as $460,000. In a 50/50 split, each spouse's equitable share is $230,000. Since the wife can only receive from the $400,000 that actually exists, she receives $230,000 and the husband receives $170,000 — effectively bearing the full cost of the dissipated funds.

What Courts Look At

Maryland judges evaluate dissipation claims by examining:

The timing of the expenditures. Spending that began or accelerated after the marriage started deteriorating carries more weight. A sudden spike in credit card activity around the time of separation is a red flag courts take seriously.

The nature of the expenditures. Were the purchases consistent with the couple's established spending patterns? A spouse who has always driven modest cars suddenly buying a $80,000 vehicle looks different from one who has always bought luxury vehicles.

Whether the other spouse knew about or consented to the spending. Unilateral, secretive spending is treated more harshly than purchases both spouses were aware of, even if one spouse disapproved.

The proportion relative to the marital estate. A $500 expense in a $2 million estate is unlikely to move the needle. A $50,000 expense in a $300,000 estate is significant.

Building a Dissipation Claim

If you suspect your spouse has been wasting marital assets, documentation is everything. Before raising the issue, compile:

• Bank statements for all joint and individual accounts, covering at least the last 12–24 months. Look for unexplained withdrawals, transfers to unknown accounts, or patterns that don't match household expenses.
• Credit card statements with line-item detail. Flag charges that can't be attributed to family spending.
• Tax returns that may reveal unreported income or unusual deductions.
• Asset transfer records — deeds, vehicle titles, or brokerage account transfers to third parties.

The discovery phase of Maryland divorce litigation also provides formal tools: interrogatories (written questions under oath), requests for production of documents, and subpoenas to banks and financial institutions. If your spouse has been transferring money to a friend or family member, a subpoena to that person's bank can reveal the trail.

Dissipation in the Context of the 2023 Reforms

Although Maryland's 2023 reforms eliminated fault-based grounds for divorce, dissipation remains fully relevant. Factor #4 in the 11 statutory factors for equitable distribution — the circumstances contributing to the estrangement — allows the court to consider marital misconduct when dividing property. A spouse who wasted marital assets during the breakdown faces consequences in the property division even though their behavior is no longer a basis for the divorce itself.

The Maryland Divorce Financial Split & Asset Division Guide covers dissipation claims alongside the broader asset classification process, providing a framework for tracking and presenting expenditure evidence in a format courts can work with.

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