What Does it Mean to ‘Waste’ Community Assets in Divorce?
When a spouse files a Petition for Dissolution or Legal Separation, Courts often issue an ‘Automatic Temporary Order Setting Financial Restraints.’
This is intended to prohibit either party from spending funds beyond those in the ‘usual course of business’ or for the ‘basic necessities of life.’ The point of the Court entering such an order is to prevent either party from hiding, wasting, or disbursing assets that the Court has jurisdiction to divide. In a divorce or separation action, the Court has jurisdiction to divide both separate and community property, so the order applies to all assets and debts whether individually or jointly held.
While there is no specific definition of ‘waste’ in this context, Washington courts have characterized waste as “negatively productive conduct, gross fiscal improvidence, the squandering of marital assets, or the deliberate and unnecessary incurring of tax liabilities.” In re Marriage of Clark, 13 Wn. App. 805, 808-09, 538 P.2d 145 (1975); In re Marriage of Steadman, 63 Wn. App. 523, 528, 821 P.2d 59 (1991).
As these financial restraints are broad, it is important to be transparent and to exercise sound judgment when using community or separate funds while a dissolution action is pending. It is always a good idea to consult with the other party when considering a big expense and be specific about the cost.
For example, if a party’s car breaks down, it is reasonable to ask for new vehicle as a ‘basic necessity of life.’ It is important to be thoughtful about the type of vehicle purchased and up front with the opposing party about the purchase. It may be considered a violation of the order if one spouse purchased an expensive luxury sports car when a reasonably priced sedan would serve the same purpose. Even if the other party agreed to the purchase of a vehicle, if they did not authorize the purchase of an expensive luxury car, this may very well be a violation of the order. This can result in a contempt finding, a judgment against that spouse, and an award of attorney’s fees.
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