Dealing with Dissipation of Assets | S2, Ep. 5


Welcome to another episode of the exEXPERTS DIVORCE etc… Podcast where we give you all kinds of information and tips on everything divorce. Why? We’ve lived it, so we get it! We’re T.H. & Jessica.

Jessica: Welcome to today’s podcast. We have with us today Lisa Zeiderman, Managing Partner at Miller Zeiderman in New York City and Westchester County. We are going to be talking today about an interesting topic, which is the wasteful dissipation of assets. First of all, Lisa, thank you so much for taking the time to be with us here today.

Lisa: Thanks so much for having me.

T.H.: Thanks, Lisa.

Jessica: Let’s literally start at the top, because for anyone listening, tell us what you mean by wasteful dissipation of assets.

Lisa: So it’s really just that. It is spending assets in a way that the law believes is wasteful. Extramarital affairs, spending money on extramarital affairs, gambling, drug use, and substance abuse would be classic areas of wasteful dissipation. They are actually very large areas for discovery. They’re ripe for discovery. If they are in a particular matter, those monies need to be actually put back into the marital pot and equitably divided in some manner.

Jessica: So this was something that was relevant in my first divorce because he had had an affair, which he had readily admitted. I mean, we knew about it. What I believe happened was we had to almost put a price on approximately what he had possibly spent during the course of that affair. They had gone to the Four Seasons in Costa Rica, they had gone on some fancy vacations, and so we put a total on it. That was money, cash basically, that I got back. I think they called dispensation at the time.

It was sort of like me getting paid back under the auspices of you spent part of my money because we were married at the time. You spent part of my marital assets on this extracurricular relationship, therefore I’m being reimbursed. Tell me if that’s accurate

Lisa: That is very accurate. You’re right that in many cases we place a number, but we try to make it an educated number. That means a lot of discovery, going through credit card statements, going back as far as we can. That’s usually eight years because many times if there was evidence of an affair later on or closer to the divorce, that affair may actually have started much earlier, where there may have been a series of extramarital affairs. We try to go back as far as we can in terms of credit card statements and bank account statements.

Jessica: When we’re talking about wasteful dissipation of assets, we’re not necessarily talking about, because this is what I had first thought when we had come up with this topic, we’re not talking about within your divorce process, one or the other spouse trying to file so many motions and trying to spend so much time with the lawyers that you’re literally wasting money on the divorce itself so that you have less at the end that you have to split. Is that also part of this?

Lisa: Not really. That goes into a different category. That becomes a different category. That is right for going back and re-calculating the marital assets from the date that we started the commencement of the action, also, perhaps, reapportioning legal fees or expert fees as a result of the actions of one spouse.

Jessica: We’re really talking specifically about money that was spent during the course of your marriage on things that would be considered wasteful by the court?

Lisa: Correct. There’s one exception to that, and I’m going to say it’s an interesting exception. It is the failure to sign a joint tax return during the pendency of a divorce. So many times I have people who come to me and say I’m not going to sign a tax return with my spouse. Now, a lot of the time they have a good reason. They have maybe expenses that are improperly being run through businesses, or there could be a reduction in income that they don’t believe is true, but those issues can usually be dealt with in an indemnification agreement, whereby the spouse who is concerned has the other spouse indemnify them. The result of not filing that joint tax return, however, can be costly because usually if you aren’t filing jointly and you aren’t divorced, it’s more costly for each person. Therefore as the family unit, it is more costly for the family unit and that too could be considered a wasteful dissipation. It also could be a wasteful dissipation if, for example, you’re refusing to sell a certain stock, and the stock takes a real dive, and you’re not really cooperating fairly in selling assets. Even a house where somebody who wants to hold on to that house to maybe squeeze the other person, and there really was no good reason to hold on to this house, and then we come to the end of the divorce and the house is worth 20% or 25% or 30% less because the market has dropped, perhaps that might be also a wasteful dissipation. There can be areas where there’s wasteful dissipation during the pendency of a divorce. But of course, we also have wasteful dissipation that would have occurred prior to the divorce.

T.H.: What do you do in a situation where, it’s not always the guy, I’m just going to say that, but let’s assume it’s the guy, is stashing money away? I heard one lawyer mention that one of the spouses was prepaying the IRS so that all the money would be there, and then he would get a credit back. However, many years later, because he overpaid by so much that he almost sheltered his money with the IRS. I mean, there are very sneaky things that I almost wish we knew, even though it doesn’t mean we would do it. I just feel like I’ve been left out.

Jessica: That’s a good scam though. Having Uncle Sam watch your money is a pretty good scam.

T.H.: But this goes back to women just not being educated properly financially. It doesn’t mean everyone would know that trick. What do you do in that case because that’s definitely hiding money and also, I guess, spending money, right?

Lisa: I think there’s a difference first of all between a wasteful dissipation and what you are speaking about. What you’re speaking about, frankly, is exactly that. Hiding or not disclosing assets or trying to basically, you have a windfall at the end that someone may not be aware of. What you need though, in that particular case, is a really good attorney, because it’s not that hard to see if someone is actually pre-paying taxes, because it’s literally on the tax rate.

T.H.: Right. You would see that there’s a huge amount of money.

Lisa: You’re going to see that you’ve overpaid the government. There’s a line item for overpaying the government, and there’s also a place to see whether the refund is going to be rolled over essentially into the following year, or is it going to be refunded to the parties. If you have a good attorney, that attorney should a) look at the tax return before you sign it, make sure and that is one of the things that I always look at on those tax returns, and particularly that line item, because it’s a great place to hide money, essentially. But that goes to discovery, and that goes to depositions and having attorneys who pay attention and watch your back.

T.H.: I don’t want to lose my train of thought, but how do you define an asset then in this case, because in my case, he used an American Express card that was joint and accrued like 200,000 points, so I actually got the miles. I got free points.

Jessica: Yeah, I should have done that. I forgot the miles.

T.H.: Me and my son talked about that. You already got

Jessica: I was going to say I was done long before that.

T.H.: Let’s talk about what an asset is because your airline miles, actually his, worked out for me to be an asset. I got money, plus I got miles.

Lisa: So those are assets. Airline miles points, all of those items are assets, and of course, retirement accounts, bank accounts, real property, personal property, antiques, art, all of those types of things, may be assets. Limited partnership interests are very common and people don’t necessarily look for but because they’re very small percentages in limited partnerships, real estate deals, etc., those are all assets. Your evaluation of a business, your business is an asset, it has to be valued. There are lots of different assets to look at. One of the first things that we try to do is to create what we call a marital estate chart so that we have a handle on all the assets.

T.H.: And a forensic accountant I assume would also play a critical role if this is the case?

Jessica: For sure.

T.H.: I did have an accountant and he is actually currently my accountant because he keeps me on track with everything that we agreed to all those years ago.

But we’ve interviewed a forensic accountant before, so tell us how this plays into your relationship with someone that you would hire if this was the situation?

Lisa: We are we are very collaborative, I will say that. That doesn’t mean that we engage in collaborative law, it means that we collaborate with other professionals so that we can deliver the best to our clients. That would mean a forensic accountant if it’s appropriate, who can analyze the lifestyle of the parties to make sure that someone is getting proper child support and alimony/spousal maintenance. It also might mean that they value the business and they look for any hidden monies, transfers, loans to officers that maybe have not been paid back but should have been paid back, and so that might actually be income. They’re going to do an examination of all of this. That in combination with depositions and discovery is going to yield, hopefully, your marital estate chart so that you can make your settlement at the end with full knowledge and control of the finances.

It’s imperative for people, particularly people who were not in control of their finances, that they have those types of professionals.

We work with financial advisors, the same person actually who introduced us, Stacy Francis. We work very closely with Stacy’s firm, and she is fabulous. She works with certainly her clients to make sure that they have the information. One of the areas that Stacy and I have lectured on is restricted stock units. That’s an asset that people often overlook or omit on net worth statements. Those are essentially units of stock equity that somebody might get in a company. It could be someone actually who works for a startup company, a large company like Macy’s, or another kind of company, and that’s becoming more popular in terms of executive compensation. Just last week, I had a deposition, and I’m looking through the net worth statement and the discovery and I see these restricted stock units, but they’re not on the person’s net worth statement. I asked about them and the person said, well, I left them off because they didn’t vest yet. But they’re still assets. They still actually, because we deal in a fractional formula for that vesting formula, they still might actually be a marital asset, at least partially, or they could have been given for a signing bonus. They might be something that does invest for four years, but there was still a signing bonus, and so the spouse may be entitled to them. There are a whole host of assets to look at.

T.H.: That was actually another piece of mine. Basically, anything you’re going to talk about, I went through it. It touches one point

Jessica: All the bells and whistles.

T.H.: But that did and in taking his new job that was part of the incentive but not to reap the financial benefit for many years later. We figured it out, and it worked out, but yeah that was pretty sneaky.

Lisa: Yes, and those sometimes people omit them, because they just don’t think of them of course, but many times

T.H.: I definitely think of it. It’s the art of the plan. It’s all a plan. Not all guys, again, I’m not saying everybody’s the same, and women can be sneaky too, but I would say it’s definitely a strategy.

Lisa: I would say it’s a strategy for both males and females sometimes. When people are getting divorced, they are not always forthcoming. And so again, it takes a lawyer who actually has knowledge of finances to make sure that they are going through the documents and getting the documents. That’s a good example of people talking about mediation all the time, and that is one of the things that mediators very rarely look for. You need to make sure you have all the documents for restricted stock units, the award letters, the grant documents, understanding what the vesting schedule is. That’s something that you want to be able to get directly from the company if you can.

T.H.: I think, one, all these points are really good, but something that keeps coming back into my mind is you said that even though you don’t do the practice of collaborative divorce, you collaborate with other professionals. That’s definitely a question that our listeners need to make sure they ask their lawyers, to what level do you collaborate with other experts in complementary fields?

Jessica: It takes a village.

Lisa: It does take a village.

T.H.: They have to be willing to do that.

Jessica: That’s right.

T.H.: Because they may want their own person and you have an opportunity to meet other people too who you want to bring into the loop, so that’s really, really important.

Lisa: It’s critical. We talked about the forensic accountant but there’s also the therapist, the psychiatrist, the career counselor, the vocational analyst, the real estate broker, right? These are all people who become part and parcel of our team when we’re working on a particular case because it does take a village.

You need to make sure for example, sometimes that you have a tax attorney. If you can’t spot those tax issues, make sure that your client is seeing a tax attorney, or that you’re working with a tax attorney, or at least an accountant who can help you with the drafting of the language for the agreement, because there are tax pitfalls in these agreements.

Jessica: That’s right. Well, I mean, we could really go on and on and on. There’s so much great stuff to be talking about. But really, thank you so much for your time, because these are, as you said, crucial issues for everybody to have to know as they’re navigating their divorce process. It’s not always easy, but it’s so important to hear it from different voices and from different perspectives and to be able to really gauge what is each person’s individual process going to look like and to know how it should work out in an ideal scenario, and also some of the pitfalls to look out for. We really appreciate all of that. For people who want to contact you directly, what are the best ways for them to find you?

Lisa: They can go to They could also call my Westchester office because we’re in the pandemic now, so I’ll give that number which is 914-455-1000. Or they can email me at

Jessica: We’re going to have all of that information on our website too. Anyone who’s listening, if you weren’t able to get all of that, if you just hop on over to we’ll have all of that are there for you. Lisa, thank you again so much for your time. We’ll talk to you soon.

Lisa: Thank you so much.

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