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Joint bank accounts can become a big issue in a divorce when one spouse takes it upon him/herself to act selfishly and irresponsibly. For example, what if a husband decides to gamble away a large portion of money in a joint savings account without the wife’s knowledge? Is the money simply gone, or is there a way for the wife to be compensated fairly for this in a divorce settlement?

Obviously, the wife’s initial reaction in this case can be one of anger and fear. Angry at her husband for gambling with money that they jointly own and fearful that she will be cheated out of money that is rightfully hers. Fortunately, there are other options for the wife so can receive her fair share of their joint assets.

Can You Be Treated Fairly?

Under community property laws, one-half of the money the husband spent belonged to the wife and the other half was his.Therefore, when dividing assets the court may award the wife a greater portion of the assets than husband to make up for one-half of what he spent.

Waste Not, Want Not

In Arizona, the court can consider “excessive or abnormal expenditures, as well as the destruction, concealment or fraudulent disposition of community assets” when dividing the community estate. Such expenditures are globally referred to as “waste.” If there are not enough other community assets to compensate you for your share of the waste, you may be awarded a money judgment against your spouse.

Findings of waste can be based on a spouse intentionally damaging or losing community property, making significant withdrawals from a retirement or other account without the other party’s knowledge, and without an accounting for the expenditures, or spending community funds on an extra-marital affair or illegal drugs. A decrease in the value of a community asset (like a house or a business), if caused by a spouse’s destruction, fraud, or “abnormal” actions, may also be considered waste.

Burden Of Proof

If you are the spouse claiming that waste occurred, it is initially your burden to show that, on its face, such spending appears to meet the legal definition of waste. If you are able to do so, it becomes your spouse’s burden to show that the spending was not waste. Your spouse can meet this burden by showing that the monies were spent for the benefit of the community (for example, paying community debts) and with your approval, or the spending was not excessive or abnormal based on the historical spending habits or lifestyle of your family.

To give you an idea of what this might look like, consider a case where one spouse sold the other spouse’s clothes at a garage sale. The court ruled that the sale of the clothes was waste and ordered the holder of the garage sale to pay to replace all of the clothing sold.

The golden rule in a divorce is to beware of vengeful actions and account for your spending if you are using community accounts. You want to be very careful to avoid a claim of waste made against you.

Contact us at Hallier Stearns PLC for more information. We are a dedicated family law practice and will give your case the time, energy, and expertise it deserves.