1. Presented by: Robert Vance, CPA/ABV/CFF, CVA, CFP and David C. Wood, CPA/ABV/CFF, CBA Tennessee Association for Justice Domestic Law Forum April 8, 2010 Forensic & Valuation Services, PLC Email: RVance@ForensicVal.com

2. Tennessee Association for Justice Domestic Law Forum Dissipation: Use of marital property frivolously and without justification For a purpose unrelated to the marriage At a time when the marriage is breaking down Altman v Altman, No. M2003-COA-R3-CV, 2005 Tenn. App. Lexus 207, at *5-6 (Tenn Ct. App. Apr. 7, 2005) (Perm. App. Denied)

3. Tennessee Association for Justice Domestic Law Forum Dissipation: …to destroy or waste, as to expend funds foolishly. Cohen v Cohen, 937 S. W. 2d 823, 827 (Tenn Ct. App. 1996) Dissipation:The use of an asset for an illegal or inequitable purpose, such as a spouses use of community property for personal benefit when a divorce is imminent. Blacks Law Dictionary 486 (7 th ed. 1999)

4. Tennessee Association for Justice Domestic Law Forum Intentional Misconduct Outright Concealment (Secret Bank Account) Hording Cash Throwing the Wifes Jewelry Into the River

5. Tennessee Association for Justice Domestic Law Forum Conduct Which is Reckless or Negligent, but not Necessarily Intentional - can amount to dissipation of marital property The Biggies: Excessive Gambling Expenditures on a Paramour

6. Tennessee Association for Justice Domestic Law Forum Careless Mishandling of Funds "First, do no harm" Flannary v. Flannary, 121 S.W.3d 647 (Tenn. 2003) Unreasonable Investments Other Less Common But Still Reckless and Negligent Actions: Loss of Value in as Business Robinson v. Robinson (TN Ct. App. 2004) Underemployment

7. Tennessee Association for Justice Domestic Law Forum Fraudulent Conveyance Within a Business Loans to Family or Friends Excessive Gifts to Children New Loans Taken on Unencumbered Property (car loan)

8. Tennessee Association for Justice Domestic Law Forum The Standard in TN: Ward v Ward No. W2001-01078-COA-R3-CV, 2002, WL.31845229 (Tenn. Ct. App. Dec. 19, 2002)

9. Tennessee Association for Justice Domestic Law Forum The Ward Factors: The spouse alleging dissipation must establish a prima facie case that marital funds have been dissipated Then the burden shifts to the spouse making the expenditures to prove the expenditures were appropriate

10. Tennessee Association for Justice Domestic Law Forum The Trial Court must consider: First, whether the evidence presented at trial supports the alleged purpose of the various expenditures (following); and if so, Second, whether the alleged purpose equates to dissipation under the circumstances

11. Tennessee Association for Justice Domestic Law Forum The Ward Factors: To satisfy the first prong, the dissipating spouse can bring forward: Receipts Vouchers Claims or similar evidence that independently support the purpose as alleged by the expending spouse

12. Tennessee Association for Justice Domestic Law Forum The second prong considers: 1. The typicality of the expenditure to the marriage 2. The benefactor of the expenditure, i.e., it is primarily benefited the marriage or the sole dissipating spouse 3. The proximity of the expenditure to the breakdown of the marriage; and the amount of the expenditure 4. The amount of the expenditure

13. Tennessee Association for Justice Domestic Law Forum Request for Production of Documents: Bank Account Statements & Canceled Checks Credit Card Statements HELOC statements Brokerage & Retirement Account Statements Personal Financial Statement from a loan file for Two to Three Years before the marital problems surfaced

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