What Counts as Wasteful Spending in a Texas Divorce?

 Posted on June 28, 2025 in Adoption

In Texas divorce cases, courts closely examine whether either spouse has engaged in wasteful financial behavior that unfairly reduces the value of the marital estate. If the spending is unauthorized and provides no mutual benefit to the marriage, it is inherently wasteful and will impact the property division process of divorce proceedings. If you believe your spouse could be wasting marital funds or hiding assets leading up to your divorce, something known as the dissipation of assets, an experienced Austin, TX divorce attorney can help you track their spending and hold them legally and financially accountable.

What Is the Dissipation of Marital Assets in Divorce?

Dissipation refers to the misuse or concealment of community property by one spouse, particularly in the context of divorce. Texas Family Code § 3.003 stipulates that all property acquired during the marriage is presumed to be jointly owned with only a few exceptions. When one spouse intentionally reduces the value of the marital estate by transferring funds, hiding assets, or making unjustified withdrawals, the court can intervene to protect the other spouse.

Under Texas Family Code § 7.001, judges are required to divide community property in a way that is "just and right," rather than strictly splitting it 50/50. This gives the court the discretion to consider each spouse’s behavior during the marriage, including financial misconduct. If one spouse has dissipated or wasted marital assets, especially through intentional or deceptive actions, the court may award a larger share of the remaining property to the other spouse.

What Are Some Common Forms of Asset Dissipation?

Dissipation can appear in both obvious and subtle ways. Some common examples include:

• Lavish or repeated gifts to third parties without spousal consent

• Moving large sums into separate or offshore accounts

• Liquidating investment accounts without justification

• Giving away high-value items like vehicles or jewelry

• Paying personal debts unrelated to the marriage

Schlueter v. Schlueter, a 1998 case where the Texas Supreme Court upheld the concept of "fraud on the community," is a perfect example. The court allowed compensation to the wronged spouse when the other had intentionally and wrongfully disposed of marital assets. This affirmed the court's authority to stray from equal division of assets to reflect what the marital estate would have been without the financial misconduct.

How Do You Prove Asset Dissipation in a Texas Divorce?

Proof of wasteful spending depends on documentation and timing. Financial records, including statements and receipts, are important. Testimony from witnesses, digital correspondence, or transaction logs can support your claim. If you believe your spouse wasted funds on an extramarital affair, proof of the affair will be useful. Your evidence must demonstrate that the spending was outside the normal course of the marriage and motivated by self-interest. Consider talking to an attorney about how forensic accountants and other financial experts may contribute to building your case.

Contact an Austin, TX Divorce Attorney Today

Divorce can involve complex financial issues that require experienced legal guidance. If you are concerned about protecting your assets and uncovering financial deception, the legal team at Powers Kerr & Rashidi, PLLC can offer compassionate support and aggressive representation. Contact our Travis County, TX divorce lawyers today at 512-610-6199 to schedule a confidential consultation.