Congratulations, you're getting married! But there's one topic most couples don't talk about before walking down the aisle…
What happens to all of your belongings if your marriage ends?
You may think, "if we break up, what's mine stays mine." But that's not always how the law works. Knowing how property laws works can literally save you thousands of dollars and years of unnecessary headache later on.
What You'll Learn:
- What Is Marital Property?
- How Dissipation of Assets can Ruin Your Divorce Settlement
- Understanding Marital vs Separate Property
- Protect your Financial Assets Wisely
What Is Marital Property?
In divorce, marital property is anything purchased by either spouse during the marriage. It doesn't matter whose name is on the title/deed or who earned money in the family.
For example, the family home you purchased together during marriage is marital property. Your retirement account you funded during marriage is also marital property.
Here's where things can get complicated…
Marital property is divided "equitably" in divorce in most states. Equitable doesn't always mean 50/50. A judge can divide marital property any way they deem "fair."
If one spouse starts spending marital money foolishly when a marriage is breaking down, this is known as dissipation of assets.
Dissipation of assets in divorce refers to the reckless spending or depletion of marital property by one spouse for a purpose unrelated to the marriage after the marriage has broken down.
Examples of dissipation include gambling losses, lavish spending on an affair, and hiding money in unknown bank accounts.
Ouch…
Judges don't like this type of behavior. If you can prove your spouse wasted marital money, a judge could award you more of the remaining marital property to compensate you.
How Dissipation of Assets Can Ruin Your Divorce Settlement
Dissipation isn't careless spending. It's intentional.
When one spouse hides money, gambles away marital assets, or wastes money on unrelated expenses, they are dissipating marital property.
And it ruins divorce settlements.
Because…
Most spouses don't even realize dissipation of assets is occurring until it's too late. By the time they discover their partner's spending behavior, much of the marital money is already gone.
They are then left fighting over a smaller chunk of the marital pie that was originally owed to them.
Examples of dissipation include:
- Spending marital money on an affair
- Gambling away joint funds
- Transferring property to friends or relatives
- Selling marital assets under market value
- Maxing out credit cards on luxury items
Notice how these acts are deliberate, and most happened after the marriage broke down.
According to Forbes, the average divorce cost anywhere from $7,000-$15,000 in 2024. But if your divorce involves high conflict, hidden assets, or dissipation accusations, your legal fees could be much higher.
Act quickly if you suspect your spouse is dissipating marital assets.
Understanding Marital vs Separate Property
All property won't be divided in divorce. Assets owned by one spouse before marriage, or acquired through inheritance or as a gift, are considered separate property.
Separate property usually remains with that spouse in divorce.
Separate property includes:
- Property acquired before marriage
- Inheritance gifts received by one spouse
- Gifts given solely to one spouse
- Personal injury awards
Marital property includes:
- Wages earned by either spouse
- Property purchased together
- Joint bank accounts
- Joint investment accounts
- Funds contributed to retirement during marriage
But….
Separate property can become marital through "commingling." If you deposit your inheritance check into a joint bank account, you may have just converted separate property into marital property.
Commingling gets messy quickly. That's why it's so important to understand property laws before marriage.
Financial arguments break up marriages every day. In fact, about 24% of couples in the United States state that finances were the leading cause of their breakup.
When couples don't see eye-to-eye on spending, saving, or managing money, chaos ensues. Understanding how property division works can alleviate tension later on.
Protect your Financial Assets Wisely
Some may think creating a prenup or guarding your assets means you're trusting your partner will cheat on you emotionally or financially.
That's not the case.
Actually, according to LegalZoom, "more than 40% of Gen Z and Millennial couples getting engaged today are considering prenuptial agreements."
Consider why lovers are flocking to prenups:
Millennials and Gen Z are getting married older in life than previous generations. Many enter marriage with their own assets they built up over the years. Some start families or businesses before marriage. Others inherit wealth from their family.
A prenuptial agreement can protect these assets.
Prenups allow couples to clarify marital property rules before emotions become involved. A good prenup can spell out what remains separate property and define spousal support expectations.
Talk About Money Openly
Don't let money come between you and your spouse. Sit down and hash out your financial goals before getting married.
Share credit scores, savings goals, debts, and spending habits with one another.
Create a Paper Trail
Document all assets brought into the marriage by both spouses. Keep a separate record of who inherits or is gifted money throughout the marriage.
If joint funds are commingled with separate property by accident, records can help identify who the original owner was.
Monitor Joint Accounts
Both spouses should have access to all bank accounts and credit cards. Catch strange activity early on.
Set up spending alerts for large purchases.
Red Flags of Dissipation
Are you worried your spouse is dissipating money? Keep an eye out for these behaviors:
- Suddenly doesn't want to discuss finances with you
- Making large withdrawals from joint bank accounts
- Opening new credit cards without consulting you
- Buying pricey items that don't benefit the marriage
- Giving "gifts" of money to friends and relatives during divorce
If you catch your spouse in these acts, contact a family law attorney ASAP. A judge can issue a restraining order preventing your spouse from dissipating more assets.
Why This Marriage Finance Topic Matters
Divorce isn't fun for anyone. But nearly 40-50% of first marriages end in divorce.
We aren't dumping this statistic on you to scare you out of marriage. Promises!
Instead, we want you to understand how taking care of your finances before marriage can help your relationship.
Couples who are open about their financial state before marriage have a better relationship than those who don't. There's a reason for that.
Knowledge!
When you know how property division works, what constitutes dissipation of assets, and how you can protect your belongings, you will have peace of mind.
Wrapping It Up
Every married person in the United States should care about marital property laws.
When assets increase or decrease during your marriage is what determines your financial outcome if divorce happens.
Let's review:
- Marital Property is any assets acquired by you or your spouse during the marriage
- Dissipation is the intentional wasting of marital money when a marriage breaks down
- Separate Property can become marital through commingling
- Prenuptial agreements allow couples to define their own financial rules before marriage
- Stay financially transparent with your spouse
The best way to approach your marriage financially is by combining clear communication, proper documentation, and legal support when necessary.
Money shouldn't be the foundation of your relationship but understanding these concepts can remove financial worries.
