New York Family Law Blog
Singh v. Singh, 36 Misc. 3d 1218 (N.Y. Sup. Ct. 2012) involved a divorce action in Queens, New York. The Plaintiff, the wife, initiated the case in 2009, seeking an absolute divorce and additional relief related to financial support, property division, and child custody. One issue that was raised was asset dissipation. Asset dissipation occurs when one spouse improperly uses or transfers marital assets in a way that depletes their value, often in anticipation of divorce or without the consent of the other spouse. This can include excessive spending, selling assets below market value, or mismanaging joint finances. In divorce cases, courts may consider evidence of dissipation when determining the equitable distribution of marital property.
Background Facts
The Plaintiff and Defendant married in 1997 and had two children. During their marriage, they lived together in a house jointly purchased by the Defendant and his father. The Defendant used both his separate savings and marital assets to contribute toward the mortgage on the marital home. Over time, the couple’s financial situation became more complicated as the Defendant and his extended family engaged in additional real estate and business investments. Both parties contributed to the household and its upkeep until they separated in 2006.
The Plaintiff left the marital home with the children and moved into an apartment owned by the Defendant’s brother. The Defendant remained in the marital home with extended family members. After the separation, the Plaintiff opened her own bank account, while the Defendant continued to manage a joint bank account that included proceeds from the couple’s business and real estate ventures. The couple’s financial relationship continued to involve both joint and individual assets, complicating the issue of how to fairly distribute these assets in their divorce. The Plaintiff filed for divorce in 2009. The divorce was uncontested, but the issues of financial support, property division, and child support.
During the divorce proceedings, both parties raised the issue of asset dissipation. The Plaintiff argued that the Defendant had engaged in wasteful dissipation of marital assets by transferring properties and selling the couple’s commercial business in anticipation of their divorce. On the other hand, the Defendant claimed that the Plaintiff had wastefully dissipated marital assets by failing to contribute financially to the household starting in October 2005 and incurring $24,000 in credit card debt.
Question Before the Court
One question before the court was whether there were instances of wasteful dissipation of marital assets? The court had to consider conflicting claims made by both parties about financial contributions and the use of marital assets.
Court’s Decision
After reviewing the evidence, the court found that Plaintiff’s claims of dissipation lacked credibility, but there was merit to the defendant’s claim. Defendant was entitled to a relative credit for the marital assets that were used to cover Plaintiff’s personal expenses after their separation.
Discussion
The court’s analysis of the wasteful dissipation issue turned on the lack of evidence from both parties, particularly from Plaintiff, to substantiate their claims. In cases of asset dissipation, the burden of proof lies with the party making the accusation. The Plaintiff alleged that Defendant had sold properties and a commercial business to reduce the marital estate in anticipation of divorce. However, the court found that the sales occurred years before the divorce was filed, and the proceeds were used to pay for legitimate marital expenses. Because the evidence did not support Plaintiff’s claim that the sales were wasteful or intended to harm her financially, the court ruled against her on this issue.
Similarly, Defendant accused Plaintiff of dissipating assets by not contributing financially after October 2005 and accumulating significant credit card debt. The court acknowledged that Plaintiff had failed to provide documentary evidence of this debt, nor could she prove that the expenses were necessary for the family. In the absence of such evidence, the court found that Defendant’s argument of dissipation held more weight. Under New York law, wasteful dissipation of assets can factor into the division of marital property. Given Plaintiff’s lack of contribution and accumulation of personal debt, the court awarded Defendant a credit for the marital funds used to cover Plaintiff’s living expenses after their separation.
Conclusion
Equitable distribution in divorce cases can be complicated. It involves more than just adding up assets and subtracting debts. Courts consider various factors, including the financial conduct of both parties during the marriage and after separation. In Singh v. Singh, the issue of wasteful dissipation highlighted the complexities of asset division. The court examined the actions of both parties to determine the fair distribution of marital property. Understanding how asset dissipation impacts equitable distribution is crucial for anyone facing similar circumstances. For assistance navigating these complex issues, it is wise to consult an experienced New York equitable distribution lawyer at Stephen Bilkis & Associates.