Wasting Marital Assets is a No-No in Mississippi

The entire concept of property division in a Mississippi divorce is rooted in fairness. In every divorce case, our Chancery courts are charged with the task of determining what is fair on a case-by-case basis. Typically, in a divorce, each spouse’s subjective view of fairness differs. Each spouse generally wants to keep as much of the marital property for themselves as possible following a divorce. And because of this general feeling and inherent goal of retaining everything possible in a divorce, a divorce can get ugly–and get ugly fast. In some cases, spouses have taken the “if I can’t have it, no one can” approach and dissipated–or wasted–marital assets that were otherwise subject to equitable (fair) distribution in divorce. A spouse’s wasteful dissipation of marital assets is a surefire way to complicate the divorce, prolong the divorce, increase attorney costs, and–most importantly–upset the Chancellor presiding over the divorce case. In other words, wasteful dissipation could be considered a “cardinal sin” in a divorce case.

“Wasteful dissipation is, by definition, ‘to indulge in extravagant pursuit of pleasure.'” Lowrey v. Lowrey, 25 So. 3d 274, 293 (Miss. 2009) (citing Webster’s II New College Dictionary 330 (1995)). Wasteful dissipation may occur during the marriage–typically in the time leading up to, or during, a period of separation–or while a divorce is pending. Accordingly, wasteful dissipation of marital assets is a prime consideration in both property division and alimony determinations in Mississippi. See Ferguson v. Ferguson, 639 So. 2d 921, 928 (Miss. 1994); Armstrong v. Armstrong, 618 So. 2d 1278, 1280 (Miss. 1993). Remember, alimony–or post-marital spousal support–is only awarded to balance the scales of fairness between the spouses following property division. Williamson v. Williamson, 81 So. 3d 262, 274 (Miss. Ct. App. 2012) (finding error where the lower court considered alimony prior to property division). So, the overarching purpose of examining any waste of marital assets is to ensure that one spouse has not inequitably wasted property that the other spouse would have been entitled to in a divorce.

Further, in Mississippi, perhaps the most recognizable and complained-about form of wasteful dissipation is one spouse’s gambling of marital assets, especially gambling with money from a joint, marital bank account. See e.g., Lowrey, 25 So. 3d at 288-91 (Miss. 2009); Craft v. Craft, 825 So. 2d 605, 611 (Miss. 2002); Smith v. Smith, 90 So. 3d 1259, 1269 (Miss. Ct. App. 2011); LaRue v. LaRue, 969 So. 2d 99 (Miss. Ct. App. 2007). Though, when examining whether wasteful dissipation has occurred, Mississippi courts have considered several things from one spouse’s failure to pay bills that led to larger amounts of marital debt, to a spouse’s frivolous spending habits, to a spouse’s liquidation or selling off of marital property on the eve of divorce, to physically damaged marital furniture resulting from one spouse’s rage-filled misconduct. See generally Dunaway v. Dunaway, 749 So. 2d 1112 (Miss. Ct. App. 1999); Wolfe v. Wolfe, 766 So. 2d 123 (Miss. Ct. App. 2000); Doyle v. Doyle, 55 So. 3d 1097, 1106-07 (Miss. Ct. App. 2010).

But to be clear, the courts have emphasized that the “. . . the legitimate spending of marital assets is not wasteful dissipation of marital assets.” Rodriguez v. Rodriguez, 2 So. 3d 720, 726 (Miss. Ct. App. 2009) (citations omitted). And more recently, the Mississippi Court of Appeals seemingly favored the approach taken by Indiana courts in assessing whether any given marital or post-marital expenditure of marital assets qualifies as wasteful dissipation. Smith, 90 So. 3d at 1268-69. The Indiana approach calls for the court to consider:

(1) whether the expenditure benefit[t]ed 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 assets.

Id. (citing Thompson v. Thompson, 811 N.E.2d 888, 915 (Ind. Ct. App. 2004)). Thus, under this approach, courts look not only to the expenditure itself but also to the intentions of the dissipating spouse; making it seem as though the underlying purpose for dissipation is just as important as the act itself. Id.

In the end, the advice is always the same: do not unnecessarily waste marital assets and do not adopt an “if I can’t have it, no one can” attitude. It is can be very difficult and unpleasant for a spouse to have to explain his or her wasteful dissipation of martial assets to a Chancellor. Because Mississippi courts seek to make divorce as fair as possible, unnecessarily wasting marital assets is seen as unfair and a dissipating spouse can pay the price for it in a divorce. Nevertheless, whether you are seeking to recover for a spouse’s wasteful dissipation or defend against such a claim, it is always important to seek help from an experienced Mississippi divorce attorney. If you or someone you know in the Jackson or Madison, Rankin, or Hinds County area needs professional assistance in a divorce or other family law matter, please call the Law Office of M. Devin Whitt for free consultation at (601) 607-5055.