In Michigan, dissipation of marital assets occurs when one spouse wastes, hides, or improperly spends marital funds. While Michigan is a no-fault state, this type of financial misconduct is a specific area where "fault" still significantly impacts the outcome of a divorce, particularly regarding the division of property.
Specific examples of dissipation identified in the sources include:
- Affair-related expenses - Spending marital money on hotels, gifts, trips, or the general support of a romantic partner. For instance, a 2024 case resulted in a spouse’s share being reduced by $47,000 due to funds spent on an affair.
- Addictions and habits - Gambling away savings or running up significant credit card debt to fund an addiction.
- Hiding assets - Transferring assets to third parties to keep them out of the marital estate, hiding income from side businesses, or maintaining secret bank accounts.
- Intentional damage - Physically destroying marital property.
- Financial irresponsibility - Squandering assets or accumulating unreasonable secret debt.
Legal Consequences
Because Michigan follows equitable distribution principles, meaning assets are divided fairly but not always equally, judges have the discretion to compensate the "innocent" spouse.
If dissipation is proven, the court may:
- Award a larger share of the remaining marital assets to the other spouse to make up for the lost funds.
- Assign the debt incurred from the misconduct solely to the spouse who created it.
- Impact spousal support, such as financial irresponsibility or squandering assets, is a factor courts consider when determining if alimony is appropriate.
Strategic Considerations
Proving dissipation requires concrete documentation, such as financial records, credit card statements, or receipts, as judges are often skeptical of "he-said/she-said" allegations without proof. Additionally, the sources suggest a cost-benefit analysis: because a contested fault dispute can cost $10,000 or more in legal fees, you should ensure the value of the dissipated assets significantly exceeds the cost of litigating the issue.
For information pertaining to your unique situation, call Little & Boylan, PLLC at (248) 809-1402. Or contact us through our online form.