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Is it Dissipation or Disposition of Assets? - Indiana Divorce Law

There is a rebuttable presumption that dividing the marital property equally is just and reasonable.  A party’s conduct relating to the disposition or dissipation of marital property may be a factor considered to rebut the presumption of an equal division.  See Ind. Code § 31-1-11.5-11(c)(4).  While fault is generally irrelevant in a dissolution proceeding, it may be relevant when considering alleged disposition or dissipation of marital assets.  In re Marriage of Coyle, 671 N.E.2d 938, 942 (Ind. Ct. App. 1996). What is the difference between dissipation and disposition?

a.      Disposition of Marital Assets.

            No Indiana court had previously defined the term ‘disposition’, therefore, the court in In re Marriage of Coyle used the meaning given in Black’s Law Dictionary, which provides that disposition is “‘the transferring to the care or possession of another.’”  Id. at 944(quoting BLACK’S LAW DICTIONARY § 471 (6th ed. 1990).  “The disposition of marital property is a separate issue [from dissipation].”  Pitman v. Pitman, 721 N.E.2d 260, 265 (Ind. Ct. App. 1999)(citing In re Marriage of Coyle, 671 N.E.2d 938, 944 (Ind. Ct. App. 1996)).  “The ‘disposition’ of marital property refers not to transfers or transactions that are wasteful, foolish or frivolous but to those that are unusual or out of the ordinary.”  Coyle, at 944.  If the issue is disposition of marital property, no showing of waste or misuse or of foolish or frivolous conduct is required to support a deviation from an equal division.  Id.

b.      Dissipation of Marital Assets.

            “Waste and misuse are the hallmarks of dissipation.”  Id.  Dissipation has also been defined “as the frivolous, unjustified spending of marital assets which includes the concealment and misuse of marital property.”  Coyle, at 943(citing Volesky v. Volesky, 412 N.W.2d 750, 752-53 (Minn. Ct. App. 1987)).  Dissipation “generally involves the use or diminution of the marital estate for a purpose unrelated to the marriage and does not include the use of marital property to meet routine financial obligations.”  Id.(citing Volesky v. Volesky, 412 N.W.2d 750, 752-53 (Minn. Ct. App. 1987)). 

             The following factors are considered in determining whether dissipation has occurred: (1) whether the expenditure benefitted the marriage or was made for a purpose entirely unrelated to the marriage; (2) the timing of the transaction; (3) whether the expenditure was excessive or de minimis; and (4) whether the dissipating party intended to hide, deplete, or divert the marital asset.  Hardeback v. Hardeback, 917 N.E.2d 694, 700 (Ind. Ct. App. 2009). 

            Intent of a party to hide, divert, or otherwise deplete the marital estate is relevant, but intent is not a required element.  Coyle, supra. (citing Kaply v. Kaply, 453 N.E.2d 331, 334-35 (Ind. Ct. App. 1983)).  Another relevant consideration is whether the spending of money from the marital estate benefitted the marital enterprise or was made for a purpose completely unrelated to the parties’ marriage.  Id.  Whether the expenditure was excessive or de minimis should be considered, and “[b]efore a spouse is chargeable with a dissipation of assets, the party claiming dissipation must show something more substantial than that the transaction was disputed at the time or that the transaction appears in retrospect to have been unwise.  Id. at 943-44.   Additionally, where the transaction at issue occurs “during the breakdown of the marriage, just prior to filing a petition or during the pendency of an action,” it may require heightened scrutiny.  Id.(citing Melnik v. Melnik, 413 N.E.2d 969, 972-73 (Ind. Ct. App. 1980)).

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