The judicial doctrine of dissipation (breach of fiduciary duty in CA) of marital assets is an attempt to balance a spouse’s right to freely transfer his or her own property against the need to protect the legal entitlement of the non-transferring spouse to marital property.
In most states, a lifetime transfers made with either the intent to deprive the transferor’s spouse of his or her share of marital property, or where transfers are made in a manner that would not be equitable to permit them to stand, are prohibited or recoverable by state statute.
To make a ruling on whether or not dissipation has occurred the courts look at all the relevant factors including for example:
1. Whether adequate arm’s length consideration is received in exchange for a transfer;
2. The ratio of the transferred property’s value to the transferring spouse’s total wealth;
3. The amount of time elapsing between the transfer of property and the divorce;
The status of the marital relations between the spouses at the time of transfer;
(i.e. Transfers during periods of marital strife)
5. The source (SP, CP or Marital Property) of the property transferred; and
6. Whether the transfer is in essence revocable or merely illusory (i.e., the transferring spouse in reality retains rights in or powers over the transferred property regardless of how the transaction is structured or documented).