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During a CA divorce, “marital waste” may impact property division

On Behalf of | Apr 13, 2022 | Divorce |

California is a community property state. This means that assets either spouse acquires during marriage become community, or marital, property. Upon divorce, a judge may divide marital property equally between parties.

To ensure a fair division, California law places spouses under an automatic restraining order that restricts the financial activity of both parties until the divorce is complete. Violating these restrictions may result in allegations of marital waste.

How does the court restrict financial activity?

Once divorce proceedings have begun, spouses need either the court’s permission or the other’s consent to take financial action that is out of the ordinary. This includes handling of assets like insurance policies, bank accounts and investments as well as the sale, purchase or transfer of real estate or personal property.

What constitutes marital waste?

In some cases, a spouse may try to spend down, hide or even damage assets to prevent their spouse from benefitting from a court division of property. However, both spouses must disclose their expenses as well as their income and assets during the divorce process. Examples of behavior that the court may consider marital waste include:

  • Gifting large sums to third parties
  • Making large, exceptional purchases on non-essential items
  • Selling property at less than market value
  • Concealing the existence of assets

When facing divorce, spouses should know that dissipating assets may have a serious impact on the court’s property division decisions. Attempting to waste or hide assets may result in a judge awarding a larger portion or even all of the marital estate to the non-offending spouse.