Dealing with dissipation in a Collaborative Divorce is delicate because the process depends on transparency, trust, and problem-solving, not litigation threats. That said, it can be addressed effectively if handled thoughtfully.
Start with full financial transparency. Collaborative Divorce requires voluntary disclosure. Use your financial neutral to gather the necessary bank and credit card statements to search for large or unusual transactions. If dissipation is suspected, the focus should be on fact-finding, not accusing.
Define what counts as dissipation. Not all spending qualifies. Dissipation usually involves spending for a non-marital purpose (an affair, gambling, secret accounts) and occurring during the breakdown of the marriage without the other spouse’s knowledge or consent.
A key advantage of Collaborative Divorce is access to neutral professionals. The financial neutral can trace funds, identify patterns and quantify the dissipated amount. Since they are jointly retained, their findings are more likely to be accepted by both sides.
Create a shared understanding. Instead of “proving wrongdoing,” the goal is to establish what happened, agreeing on whether it was inappropriate and determining the financial impact. This keeps the process from becoming adversarial.
Once quantified, dissipation is typically handled through equitable adjustments, such as credit to the other spouse in asset division, an offset against other marital property or an adjustment in support.
Use your coach or facilitator. Your mental health professional can help manage emotional reactions, keep discussions productive and prevent the issue from derailing negotiations. This is critical. Dissipation can easily escalate conflict.
Most important is to maintain the Collaborative commitment. If one party refuses disclosure, continues hiding assets or acts in bad faith, then the process may break down, and parties might shift to litigation. Often, the threat of losing the Collaborative Process motivates compliance.
In court, dissipation is about proving fault. In Collaborative Divorce, it’s about understanding, quantifying, and fairly reallocating without destroying the process.
Join us on our Thursday Happy Hour at 4:30 Eastern as we continue this discussion.
