Money is a source of tension in many marriages. When one spouse has issues with spending or otherwise wastes family assets, those issues can multiply. How does a court divide assets in a case where one spouse has gambled away substantial amounts of the couple’s money? This article will explain how gambling may affect a judge’s decision to divide the couple’s property in a divorce.
Property Division Generally
In a typical divorce, a court’s decision on how to divide property is a relatively straightforward one. The judge will add up the couple’s assets and debts and apportion them between the spouses either equally (in the case of community property states), or fairly, while not necessarily equal (in equitable division states). In this process, the court is dealing only with assets or debts that are in existence at the time of the divorce.
The division of assets in community property states consists essentially of two steps. First, the court will determine what assets are part of the marital estate and which are each spouse’s separate property. Second, the judge will divide the marital estate equally (or 50/50) between the spouses.
In equitable division states, courts can take into account several different factors when deciding how to split your marital estate. The specific factors a judge can consider vary from state to state, but in general, judges will consider the following types of issues:
- each spouse’s contributions to the marriage, both financial and nonfinancial
- the length of the marriage
- each spouse’s age and health
- the couple’s standard of living during the marriage
- the types and values of the couple’s assets
- each spouse’s needs after the marriage
- each spouse’s ability to earn income
- the couple’s children’s living arrangements, and
- in some jurisdictions, the spouses conduct during the marriage.
Typically, there’s no formula for how courts weigh these different factors; judges treat each case on its own and do what’s fair under the circumstances.
Property Division When a Spouse Gambles
Courts are primarily concerned with what a couple has at the time of the divorce and don't extensively review each spouse’s spending during the marriage. However, in some states, judges will consider financial misconduct that has reduced the martial estate.
For example, courts may look closely at money spent by one spouse on adulterous affairs, retirement accounts cashed out without the other spouse’s knowledge, and attempts to hide money from the other spouse. Similarly, judges can consider a spouse’s gambling if it led to losses of marital funds.
In some situations, for example, when one spouse has a gambling problem that has dissipated the marital estate, a court may take actions to compensate the other spouse. For example, if a couple has $250,000 in net worth at the time of the divorce because the husband spent $50,000 gambling in the last year of the marriage, it wouldn’t be unusual for the court to grant $150,000 in assets to the wife, and $100,000 in assets to the husband. Such a clean calculation won’t always be the case, however.
A judge is likely to look at all circumstances surrounding the gambling. For example, if the wife in the above scenario knew of the husband’s gambling and didn’t object, or condoned the gambling, it’s less likely that the court will compensate the wife with a larger share of the marital assets.
In equitable division states, a judge may punish a gambling spouse severely, or not at all, depending on the circumstances. The more a spouse lost from gambling, the smaller the share a judge may give that spouse when dividing property.
In community property states, however, courts are generally more limited in what they can consider when dividing property. A judge may, however, determine that debts a spouse racked up from gambling are that spouse’s separate debt, and refuse to take that debt into account when dividing the marital assets. The court will call the gambling losses “marital waste,” and can assign those debts solely to the gambling spouse.
Whether you live in a community property state or an equitable division state, if you want to be reimbursed for your spouse’s gambling, it may not be enough to simply show that your spouse gambled away marital funds.
You should gather any evidence that would help show you didn't approve of the gambling. This evidence may take the form of emails or text messages between the two of you or witnesses who can testify that you voiced concerns about the gambling prior to filing for divorce. You should also obtain direct evidence of the gambling when possible, including IOUs, documented evidence of gambling debts, betting records, bank or credit card statements, and anything else that shows your spouse’s gambling habits.
Getting compensation for your spouse’s gambling habits isn’t an easy or straightforward process—there’s no formula judges use to reimburse spouse’s for wrongful spending during a marriage. Because of this, it’s highly recommended that you speak with an experienced family law attorney in your area.