Key Takeaways: Dissipation of assets in a Las Vegas divorce happens when one spouse uses community property for a purpose unrelated to the marriage, usually while the marriage is breaking down or after divorce becomes likely. NRS 125.150 requires an equal division of community property to the extent practicable. Courts may order an unequal division when there is a compelling reason, and Nevada case law, including Lofgren v. Lofgren, recognizes financial misconduct as one such reason. Courts generally focus on when the spending happened and what it was for. The remedy is usually compensatory, often a credit against the wasteful spouse’s share, and not a punishment. Building a claim generally depends on NRCP 16.2 financial disclosures, formal discovery, and forensic tracing. Temporary orders can help protect assets while the case is pending. Recovery depends on the evidence and on how much community property is left, so outcomes vary.
Dissipation of assets happens when one spouse uses community property for a purpose unrelated to the marriage, usually while the marriage is breaking down or after a divorce becomes likely. Common examples include large transfers to a new partner, heavy gambling losses, unexplained cash withdrawals, or selling business equipment below its value. In a Las Vegas divorce, the court may account for those losses when it divides the remaining marital estate. If you suspect your spouse has drained, moved, or wasted shared assets, it helps to understand how Nevada law treats this conduct and what evidence a court will expect.
At Ford Law, we help clients in Summerlin and across Las Vegas trace community assets and present dissipation claims with clear, court-ready documentation. Our founder, Chris Ford, is a former forensic accountant and a former partner at Ford & Friedman. That background shapes how we review financial records. To talk through your situation, call 702-710-2140 or schedule a consultation with Ford Law to protect your interests.
The Legal Foundation for Dissipation Claims Under Nevada Law
Nevada is a community property state, so property and income acquired during the marriage are generally community property, with exceptions such as gifts, inheritances, and property covered by a valid agreement. Under NRS 125.150(1)(b), the court must divide community property equally to the extent practicable. The exception is when it finds a compelling reason for an unequal division and explains that reason in writing. Financial misconduct, including dissipation, is a recognized compelling reason.
The Nevada Supreme Court addressed this point in Lofgren v. Lofgren, 112 Nev. 1282, 926 P.2d 296 (1996). The court held that a spouse’s financial misconduct, such as wasting or secretly transferring community assets, can justify an unequal division. Later decisions, including Putterman v. Putterman, 113 Nev. 606, 939 P.2d 1047 (1997), and Kogod v. Cioffi-Kogod, 135 Nev. 64, 439 P.3d 397 (2019), built on this rule. The remedy is generally compensatory. Its goal is to restore the balance the wrongdoing spouse disturbed, not to punish.
Nevada courts also have authority to protect property while a case is pending. Under NRS 125.050, a court may issue orders about community property during a divorce action when one party appears likely to undermine the court’s final property orders. In Clark County, either party may request a joint preliminary injunction under EDCR 5.517, which limits transferring, hiding, or disposing of property while the case moves forward. It is not automatic, and its reach depends on when it was issued and its terms.
Equal Division Versus Equitable Adjustment
The legal starting point is equal division, and any adjustment generally has to be based on evidence. A court may award the harmed spouse a larger share of the remaining estate to make up for dissipated funds. This often works as a credit, meaning the dissipated amount is treated as though the wasteful spouse already received it. The court has discretion, and each result depends on the record presented.
How Courts Identify Dissipation of Assets in Divorce
Courts usually look at two main questions: when the spending happened and what it was for. Academic commentary, including an Akron Law Review analysis, describes dissipation as one spouse’s use of marital property for a non-marital purpose, typically during separation or in contemplation of divorce. That article is secondary authority. In Kogod, the Nevada Supreme Court adopted a similar definition: using marital property for a purpose unrelated to the marriage while the marriage is undergoing an irretrievable breakdown.
Timing of the Expenditure
Spending close to separation or a divorce filing tends to draw the most scrutiny. Routine household expenses paid during an intact marriage are rarely treated as dissipation. A sudden pattern of withdrawals after one spouse decided to leave can suggest something very different. Courts may consider when the marriage began to fail, and that date is often disputed.
Purpose of the Expenditure
The central question is whether the money served the marriage or only one spouse. Paying a mortgage, family medical bills, or legitimate business costs generally counts as a marital purpose. Courts may consider the following as indicators of dissipation:
- Gifts, travel, or housing paid for a romantic partner outside the marriage
- Gambling losses well beyond the couple’s historical pattern
- Transfers to relatives or friends with no documented repayment terms
- Selling community assets for less than fair market value
- Intentionally running down a business’s revenue or delaying income until after the divorce
Where Dissipation Commonly Appears in Complex Estates
When an estate has many layers, dissipation is often harder to see than a single large withdrawal. In the Summerlin area, many families hold real estate portfolios, closely held businesses, medical practices, or executive compensation from the casino and hospitality industry. Each gives a spouse different ways to move value quietly.
| Asset Type | How Dissipation May Occur | What Is Typically Examined |
|---|---|---|
| Closely held business | Inflated expenses, payroll to associates, deferred receivables | General ledgers, tax returns, bank statements |
| Real property holdings | Below-market sales, undisclosed refinancing | Deeds, closing statements, loan records |
| Executive compensation | Deferring bonuses or equity until after the decree | Employment agreements, vesting schedules |
| Retirement accounts | Early withdrawals or unexplained loans | Account statements, plan records |
Ford Law gives legal guidance on how these assets are characterized and divided; we do not provide financial, tax, or investment advice. When records are complicated, the court or the parties may retain a forensic accountant to rebuild cash flows and value business interests. You can learn more about what a forensic accountant does in this process.
💡 Pro Tip: If possible, make secure copies of financial statements, tax returns, and business records you can lawfully access before separation. Early records often make tracing much simpler later.
Building a Dissipation Claim in a Las Vegas Divorce
The spouse who alleges dissipation usually needs to make a credible initial showing that it occurred. After that, the court will often expect the spouse who controlled the funds to explain how the money was spent. How the burden is allocated depends on the facts and the court.
Mandatory Financial Disclosure Under NRCP 16.2
Nevada Rule of Civil Procedure 16.2 requires both parties in a divorce to make full financial disclosures, including a sworn financial disclosure form and supporting documents. These disclosures are often the first place inconsistencies show up. Missing accounts, unexplained drops in balances, or income that does not match lifestyle can all point to further discovery. A party who fails to disclose may face sanctions, depending on the circumstances.
Discovery and Forensic Tracing
When disclosures leave gaps, formal discovery tools can help fill them. These may include subpoenas to banks and businesses, depositions, and requests for production. A forensic accountant can trace funds across accounts and entities and prepare findings for the court. Chris Ford’s experience as a former forensic accountant helps our team decide which records matter and how to organize them persuasively.
💡 Pro Tip: Ask your attorney early whether a temporary order is appropriate to preserve specific business interests or accounts. Preventing a loss is usually more practical than recovering it later.
Practical Limits and Challenges in Proving Marital Waste
Dissipation claims depend heavily on the facts, and courts do not treat every disputed expense as marital waste. Bad investments made in good faith, ordinary lifestyle spending, or a business downturn may fall outside the doctrine. A judge may also decide that small or poorly documented amounts do not justify an unequal division.
Recovery can also be limited by what is left. An offsetting award only helps if enough community property remains to make up the difference. When assets are already gone, other remedies may need to be evaluated. Every case is unique, and no attorney can guarantee a particular result.
Frequently Asked Questions
1. Does dissipation affect alimony in Nevada?
It may. When courts decide alimony, they weigh the factors in NRS 125.150, including each party’s financial condition and the value of the property each receives. If dissipation changed the parties’ finances, it could be relevant.
2. Can spending before the divorce filing count as dissipation?
Yes, under certain circumstances. Courts may look at spending that happened after the marriage began to break down, even before anyone filed. Identifying that point in time is often contested.
3. Is gambling automatically considered marital waste?
No. Courts generally compare the losses to the couple’s historical habits and look at when they happened. Losses far beyond the established pattern, especially close to separation, are more likely to be scrutinized.
4. What if my spouse hid assets in a business?
Business records, tax returns, and bank statements may be subpoenaed and reviewed. A forensic accountant may be retained to trace transfers and value the business interest.
5. Will the court punish the spouse who dissipated assets?
The remedy is usually compensatory. Courts generally adjust the property division to restore the harmed spouse’s share. Separate sanctions may apply for disclosure violations or for violating court orders, such as a preliminary injunction.
Protecting What You Have Built
Dissipation of assets in divorce is a recognized basis for an unequal property division under NRS 125.150 and Nevada case law. Courts generally focus on the timing and purpose of expenditures and expect documented evidence. Full disclosure under NRCP 16.2, careful discovery, and forensic tracing often make a claim credible. If you are dealing with dissipation of assets in divorce, working with an experienced dissipation of assets in divorce lawyer can help you approach the issue strategically and calmly.
Contact Ford Law today to discuss your case. Ford Law serves clients throughout Las Vegas from our Summerlin office, and you can reach our team at 702-710-2140.
Disclaimer: This content is for informational purposes only and is not legal advice. Every case is unique, and results may vary. Consult an attorney about your specific circumstances.
