Sex, Drugs & Too Many Purses

What is Marital Waste?

Marital waste occurs when one spouse spends community funds irresponsibly.   And without the permission of the other spouse. Clear examples of marital waste would be money spent on illegal drugs or prostitutes.  Although proving these examples in court is hard to prove,  because there is no record.  Drug dealers don’t usually take American Express.   Less clear examples, and the ones we often go to court over, are gambling, excessive spending, and illegal transfers of assets.

Diving Community Property

Nevada is a community property state. This means everything purchased or acquired during a marriage is owned by both spouses jointly.  Regardless of whose name is on the property.   In a community property state,  all community property is  divided equally between the spouses in a divorce. One exception to this rule is when marital waste is proven.  If a spouse can show marital waste, the judge may give the non-wasting spouse more of the assets.

Nevada divorce law says, the court shall make an equal disposition of the community property, except the court may make an unequal disposition of the community property  if the court finds a compelling reason to do so.   Marital waste is a “compelling reason”. 

Types of Marital Waste

Illegal Purchases –  Money spent on prostitutes or illegal drugs is marital waste.  The only challenge we usually run into with this type of waste is proving the money was actually spent.  Most of these transactions are made in cash.  Typically, we need more evidence than ATM withdrawals to prove waste.   Although, we have shown waste by showing excessive, unexplained ATM withdrawals.

Marital Affairs –  Money spent on an affair would be marital waste as well.   Hotels, airline tickets, cruises tickets, or jewelry spent to further the affair are waste.   Any expenses related to the affair would be considered marital waste and the court would order the cheating spouse to reimburse the community.

Too Many Purses –  We call this excessive spending.  To determine whether the spending was ‘excessive’, the judge will examine the parties’ way of life prior during the divorce. If parties were excessive spenders prior to the start of the divorce, it will be harder to prove marital waste.

What exactly is being purchased is highly relevant to determining whether marital waste has occurred.  A spouse who has always purchased dozens of purchases a year is probably not excessively spending.   Compared to a spouse who never buys purses, but the month after the divorce was filed buys $20,000 in purses.   We’ve also have seen the husband who purposely buys a $100,000 F-150 Raptor the month after filing the divorce.   Both these examples would be marital waste.

Transferring Assets –  Intentionally losing, giving away, or transferring property or assets without permission of the other spouse are very clear examples of marital waste.   We commonly see a spouse transfer a bank account to their mother, or add their brother on the house deed.   This is a fraudulent transfer and is waste.  A similar trick is selling the $20,000 car for $10,000 to your best friend.  This is waste.

Gambling –   No judge in Las Vegas is going to openly declare “all” gambling is marital waste.   Gambling waste occurs when it’s excessive and not known by the other spouse.  Our courts have taken the position that if a spouse knows about the gambling, and the gambling is not excessive, no marital waste.

Bad Investments –  It can be hard to establish a losing investment as marital waste because the stock market and other investments often lose value.  Even experts make bad investments.  This is another area where the judge will consider the lifestyle and habits of the parties prior to and during the separation. If a spouse is an experienced successful investor who apparently makes a series of extremely poor investment decisions, inconsistent with their experience, you may convince a judge  marital waste occurred.

Hidden Assets –  Moving money to hidden account is waste.   If the money is found, it is technically not waste.   Just hidden.  Found assets are divided evenly.  Although, the judge may award the innocent spouse more of this asset as sanction to the hiding spouse.   If the movement of money can be shown, but not found, then waste has occurred.  The judge will award the non-wasting spouse compensation for the moved money.

Reimbursement of Marital Waste

When a judge finds marital waste exists in a divorce , the amount of money “wasted” gets added up. This amount is added to the non-wasting spouse’s half of the community property.  For example, Bill and Jane get divorced with $500,000 in total assets.   The court finds Bill wasted 50,000 during the divorce.   Jane will get the $250,000, plus half of the $50,000 Bill Wasted.   Jane will receive $275,000.  Bill will only receive $225,000.  Jane may also receive reimbursement of attorney fees spent proving the marital waste.