Although Colorado is a “no-fault” divorce state and evidence of a spouse’s misconduct is generally inadmissible at trial, the one exception is evidence of marital waste. Marital waste is the intentional misuse of marital funds in a way that deprives the other spouse their fair share. Some examples of marital waste include spending money on gambling, drug or alcohol addiction, mistresses, prostitutes, or bad business transactions. The benefit of making a marital waste argument is to receive reimbursement for the amount misused through an unequal division of assets and liabilities.
In order to prove there was marital waste, a spouse only needs to show that the misuse of funds occurred during the breakdown of the marriage and the misuse was for a non-marital purpose. A spouse may defend himself/herself against a marital waste claim by proving the amount spent was for a legitimate purpose. A legitimate purpose may include obtaining new living arrangements, hiring attorneys, and paying off debts. Spending marital funds in order to pay bills or obtain new living arrangements does not constitute marital waste.
Attorneys have a number of tools available in order to figure out how much money was “wasted” by your spouse. Parties in Colorado are required to provide financial disclosures of their current assets and liabilities, including supporting statements reflecting detailed transactions. Attorneys may issue discovery, requesting years of detailed financial statements and answers to specific questions that could prove a marital waste claim. Attorneys also have the ability to take depositions of potential witnesses. If a party or an attorney is able to trace a misuse of funds for a non-marital purpose, the court will likely find marital waste. If a court determines there was marital waste during the marriage, the court will adjust the division of property to offset the marital waste.
If you or your spouse is considering divorce as the result of an extramarital affair, gambling addiction, or drug/alcohol addiction, it’s important to speak with an experienced divorce attorney to assist you with your or your spouse’s marital waste claim.
For all your divorce and family law needs, please contact the Domestic Team at Feldmann & Nagel, LLC.