Dissipation of Marital Assets: What a Forensic Accountant Can and Cannot Show
When a client says the other spouse has been spending marital money on something other than the marriage, the financial question is narrow: what left, when, to whom, and how that compares with normal. Whether it counts as dissipation, and what the remedy is, belongs to the court.
The legal frame, briefly
States differ on whether dissipation is recognized, what must be proved (timing, purpose, intent, marital breakdown), and the remedy, which is often an adjustment in the division of property. Confirm the standard in your jurisdiction. The analyst's role is to build the factual record the legal standard will be applied to.
The insight: spending is only unusual compared with a baseline
A schedule of large payments without a baseline invites one answer: that is what this family always did. The work begins with 24 to 36 months of normal spending, drawn from the same accounts. Against that, the analyst can show what changed: new payees, new categories, larger or more frequent cash withdrawals, transfers to third parties, newly opened accounts, and a pattern that starts or accelerates around a specific date.
What a forensic accountant can show
The baseline. Typical monthly spending by category over a defined period before the change.
The departures. Payments and transfers outside the baseline, by amount, date, payee, and category, with the source document for each.
The timeline. When the departures began, relative to separation, a filing, or other events in the case.
The totals. Amounts by category and payee, whose account each came from, and how much is documented as opposed to inferred.
Where the money went. Whether funds moved to an account or asset that still exists, which can be located and addressed, or were consumed.
What a forensic accountant cannot show
Intent or purpose. A payment record shows an amount, a date, and a payee. It does not show why the payment was made.
Relationships. A payee's name does not establish who the person is.
Whether a payment benefited the marriage. A trip, a gift, or a loan to a relative may have a marital purpose or may not, and that is a finding for the court.
The legal label. Whether a series of payments is dissipation is the court's determination.
A good report keeps those lines clear. It states the facts, the totals, and the gaps, and leaves the characterization to counsel.
Sort findings by how well they are supported
Group each finding in one of three tiers: confirmed by third-party or primary records, probable from a consistent pattern, or unexplained and requiring discovery. The third list is the most useful to you, because it turns into interrogatories, document requests, and subpoenas.
Records that matter now
Bank and card statements are only the start. Payment apps such as Venmo, Zelle, and PayPal, casino player records, cryptocurrency exchange statements, and loan or title records often show what bank statements cannot. An expert works from records obtained through disclosure, discovery, or subpoena. Do not obtain access to the other party's accounts in any other way.
Questions to ask your expert
What baseline was used, and why that period?
Which departures from the baseline are documented, probable, or unexplained?
When did the pattern begin, and what happened around that time?
Where did the money go, and can any of it be traced to an existing asset?
Which third-party records should we seek next?
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