Material Waste – When Community Property May Not Be Divided 50/50

As stated in previous blogs, the general rule is community property will be divided equally by the courts. The one exception to that rule is the concept of marital waste. Generally, marital waste is when community funds are not spent for the benefit of the community, but it must rise to the level of financial misconduct. The Courts are very clear that overspending of community funds is not waste as both parties have an undivided equal interest in the community. If one spouse spends 90% of the community funds, that is not waste (unless it constitutes financial misconduct) So, yes, that means the wife can go on her shopping spree and buy 20 new pairs of shoes or the husband can buy his mid-life crisis motorcycle and there is not much the court will do about it (if it occurs before a divorce action is initiated).

So what is marital waste? Generally, it is when financial misconduct causes economic harm to the community. Those are some fancy words, so what does that mean? In our experience, here are what we have found potentially valid waste claims:

1- Spending money on a new significant other

2- Gambling

3- Brothels

4- Drugs or Alcohol

5- Hiding money

6- Excessive spending that rises to the level of financial misconduct

Now, with all of this being said, remember a couple of things:

First, to prove marital waste in court, it must be proven by clear and convincing evidence, which is a higher burden of proof than the standard preponderance of the evidence standard.

Second, you are only entitled to your 50% share of the wasted funds, not all of it. Moreover, the only way to be compensated for the waste is an unequal division of the community estate. In some cases, there is not enough community estate to cover the value of the waste claim.

Third, if you acquiesced to the behavior during the marriage, you may be deemed to have waived the right to make a waste claim.

Practically speaking, seeking a waste claim is difficult and often times will cost more in attorney’s fees than what you would get in return. It is important to do a cost/benefit analysis before litigating a waste claim, and as always, consult with a family law attorney to get advice on the best and most practical approach. If you would like to learn more, don’t hesitate to call 775-622-9245