Dissipation of marital assets happens when one spouse intentionally wastes, hides, or transfers marital property to reduce what the other spouse receives in a divorce. Colorado courts may consider dissipation of marital assets when dividing property. Even though Colorado divides property without regard to marital misconduct, courts can hold the responsible spouse accountable. Judges do this by recapturing the value of what was lost and adjusting the property division accordingly. At Baker Law Group, PLLC, we help clients across Colorado identify dissipation, document it properly, and present it to the court in a way that protects their financial interests.
This guide explains what dissipation of assets in divorce means under Colorado law, what qualifies as dissipation, and what steps you can take if you suspect it is happening in your case.
What Is Dissipation of Marital Assets Under Colorado Law
Dissipation of marital assets is the intentional depletion, concealment, or misuse of marital property by one spouse. It typically occurs in anticipation of divorce or during the divorce process itself. Colorado courts distinguish between two types of spousal misconduct: marital fault and economic fault. Under C.R.S. § 14-10-113, Colorado divides marital property without regard to marital fault. This means affairs, cruelty, and personal misconduct play no role when the court decides who gets what. Dissipation is one of the fact patterns Colorado courts recognize as a proper consideration in property division, even within a no-fault system.
Colorado case law supports this. In In re Marriage of Jorgenson, (143 P.3d 1172 (Colo. App. 2006)), the Colorado Court of Appeals held that while marital misconduct cannot be considered in dividing assets, courts may account for dissipation (economic fault) as a property-division factor in extreme cases. The operative word is extreme. Reckless spending, poor financial decisions, and general mismanagement of money do not automatically qualify as dissipation. The conduct must be intentional. It must also connect to a period when divorce was likely or already underway. Finally, it must result in a meaningful reduction of the marital estate.
Once either spouse files a divorce petition in Colorado, the automatic temporary injunction under C.R.S. § 14-10-107 prohibits both spouses from transferring, concealing, or disposing of marital property without consent or a court order. Conduct that violates its specific terms can carry consequences beyond property division, including contempt of court.
Examples of Dissipation of Marital Assets
Not every financial misstep counts as dissipation. Colorado courts look at the intent behind the spending and its connection to the divorce. The following are the most common examples of dissipation of marital assets that courts in Colorado take seriously:
- Spending marital funds on a girlfriend, boyfriend, or extramarital relationship, including gifts, travel, and accommodations
- Transferring assets to family members or friends at little or no value with the expectation of getting them back after the divorce
- Draining joint bank accounts or retirement funds in the period leading up to or during the divorce
- Gambling away significant marital funds
- Running up joint credit card debt on personal expenses that benefit only one spouse
- Deliberately underperforming in a business or allowing it to decline to reduce its value before property division
- Hiding cryptocurrency, cash, or other assets from financial disclosures
- Canceling or cashing out insurance policies in violation of the automatic temporary injunction
Timing matters. Courts treat spending that happened years before any divorce differently from spending that occurred when the marriage was clearly deteriorating or after divorce proceedings began. Denver District Court and courts across Colorado look at the totality of the financial picture, not individual transactions in isolation.
How Colorado Courts Handle Dissipation of Assets in Divorce
When a court finds that dissipation occurred, it does not simply note the misconduct and move on. Colorado courts can recapture the value of dissipated assets and treat that value as if it still exists in the marital estate. In practical terms, the spouse who dissipated assets receives a smaller share of what remains. The other spouse receives an offset equal to their portion of what was lost.
For example, if one spouse drained $80,000 from a joint account to fund an affair, the court may add that $80,000 back into the marital estate for purposes of division. The spouse who dissipated the funds may receive $40,000 less from the remaining assets, effectively restoring the other spouse’s share. This is not guaranteed, and the court retains discretion over how to handle the recapture. The stronger your documentation, the more likely the court is to act on it.
If you are going through a divorce in the Denver metro area and believe your spouse has already begun moving money or hiding assets, a Denver divorce lawyer at Baker Law Group, PLLC can file for emergency relief and move quickly to protect what remains of the marital estate.
How to Prove Dissipation of Marital Assets
Dissipation claims require evidence. Courts will not award a recapture based on suspicion alone. To succeed on a dissipation claim, you generally need to show three things: first, that the asset was marital property. Second, that your spouse intentionally depleted or concealed it. Third, that the depletion connected to the breakdown of the marriage rather than a legitimate expense.
The types of evidence that support a dissipation claim include:
- Bank statements showing large or unusual withdrawals
- Credit card statements revealing spending on a third party or unexplained purchases
- Wire transfers or checks made out to family members or unfamiliar recipients
- Tax returns showing income that does not match reported assets
- Business records reflecting sudden losses or underreporting of revenue
- Digital records, emails, or messages connecting the spending to an affair or intentional concealment
- A forensic accountant’s analysis tracing the movement of funds over time
In cases where significant assets exist or a business forms part of the marital estate, forensic accountants are often essential. They can trace transactions going back several years and identify patterns that a single bank statement would not reveal.
Along the Southern Front Range, clients in El Paso County working with a Colorado Springs divorce lawyer at our firm have access to financial professionals we work with regularly on complex asset cases. Getting the right expert involved early makes a measurable difference in what the court ultimately sees.
What to Do If You Suspect Dissipation Is Happening
Time matters in dissipation cases. The longer you wait to act, the more assets can move beyond the court’s reach. If you suspect your spouse is dissipating marital assets, take these steps as soon as possible.
Start pulling financial records immediately. Access every joint account, credit card, retirement statement, and tax return you can reach legally. Make copies and store them somewhere your spouse cannot access. If you share financial accounts, monitor them closely for unusual activity.
Tell your attorney before confronting your spouse. Tipping off a spouse who is hiding assets often accelerates the behavior. A calculated, documented approach produces far better results than a direct confrontation that sends money further underground.
Ask your attorney about filing for temporary orders. Colorado courts may issue temporary or protective orders requiring disclosure of all financial accounts or restricting your spouse’s ability to transfer property during the divorce. These are not automatic in every case, but they are available and can be pursued early when dissipation is a concern.
Consider a forensic accountant if the finances are complex. If your spouse owns a business, holds cryptocurrency, or has income sources that are difficult to trace, a forensic accountant can conduct a formal analysis and provide an expert report for the court.
For clients in Northern Colorado handling financially complex divorces, a Fort Collins divorce lawyer at Baker Law Group, PLLC can connect you with the financial professionals and legal strategy your case requires from day one.
If You Have Been Accused of Dissipation
Dissipation claims go both ways. If your spouse has accused you of dissipating marital assets, the accusation alone does not determine the outcome. Colorado courts require proof, and not every spending decision made during a difficult marriage qualifies as a dissipation of assets in divorce. Ordinary expenses, personal purchases made with the other spouse’s knowledge, and legitimate business decisions typically do not meet the legal threshold for dissipation.
If you are facing this accusation, gather your own documentation. Receipts, bank records, and any communication showing the spending was known to or approved by your spouse can significantly undermine a dissipation claim. Work with an attorney who understands how Colorado courts weigh these arguments and can present your financial history in its proper context.
Speak to Our Colorado Divorce Attorney About Your Financial Rights
Dissipation of marital assets is one of the most consequential financial issues in a Colorado divorce. Whether you are trying to prove it or defend against it, the outcome depends on documentation, timing, and legal strategy. At Baker Law Group, PLLC, we handle complex financial disputes in divorce cases across Colorado and know exactly what courts need to see to take a dissipation claim seriously. Contact us today to schedule a confidential consultation with a Colorado divorce attorney and find out how to protect your share of the marital estate.
