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Financial misconduct can influence the outcome of a divorce

On Behalf of | Mar 22, 2024 | Firm News |

Divorce has a way of becoming quite messy. Spouses may suddenly change how they behave because of the stress or anger that the divorce generates in them. Someone who feels betrayed or hurt might lash out at their spouse and seek a divorce outcome that undermines state law.

In North Carolina, the goal of property division proceedings is an equitable or fair settlement. Some people try to diminish what their spouses receive in a divorce by engaging in financial misconduct. Those who identify financial misconduct can potentially protect themselves from an unfair outcome to their divorce proceedings.

What types of misconduct affect divorces?

There are two primary ways in which one spouse might attempt to manipulate the outcome of a divorce. The first involves intentionally hiding assets. They may exclude certain resources or financial accounts from their inventory of assets.

The second common form of financial misconduct involves the dissipation of marital resources. Dissipation might entail wastefully spending marital funds, such as emptying a checking account during a shopping spree. Accruing excessive amounts of debt right before the end of a marriage could also constitute dissipation. Giving away or destroying marital property might also lead to accusations of dissipation. Even the funds spent when conducting an affair could constitute dissipated assets.

How does financial misconduct affect divorce?

When one spouse fails to identify the misconduct of the other, dissipation or hidden assets can deprive one person of their fair share of the marital estate. If the other spouse can identify that misconduct and prove it to the courts, they could secure a more favorable outcome to the property division process.

For example, the courts might hold someone financially accountable for the value of assets they destroyed or gave away. The courts could also decide that certain debts should not be part of the marital estate because someone accrued them in an inappropriate attempt at dissipation or while conducting an extramarital affair. In cases involving hidden assets, proof that someone lied about their holdings could lead to the courts imposing a penalty when they divide other marital property.

The more resources contained in a marital estate, the greater the incentive for financial misconduct. Those who understand that inappropriate financial behavior is common during contentious divorces may be in a better position to protect themselves. Learning more about North Carolina’s laws and the marital estate itself could help people push for the best possible outcome despite the manipulation or misconduct of a spouse.