In a divorce, one of the more challenging tasks can be to determine who should receive which property and how much they should receive. Splitting up finances can be very emotionally difficult for couples and can bring up feelings of resentment, frustration, and anger. In order to protect what they believe to be theirs, some spouses resort to taking jointly owned funds prior to a divorce and attempting to divert them for personal use. To avoid this problem, many courts will require a strict accounting of funds and assets in a divorce, dating back to well before the actual divorce papers were filed. If money cannot be taken into account, it may be held against the person who spent it, as a recent Wisconsin divorce case illustrates.
In In Re Marriage of Bodart v. Balthazor, Jane Bodart and Leslie Balthazor divorced after more than 30 years of marriage together. Sometime shortly prior to the divorce, Leslie emptied an IRA account in his name that held over $70,000 in assets. During the divorce, the parties began to dispute the division of assets and property, and Jane requested a full accounting of the money withdrawn from the IRA account. Leslie provided bank statements to show when the money was withdrawn, but he could not account for how it was all used. At trial, he testified that more than 95 percent of the assets were used to pay for joint marital expenses, rather than his own personal interests, but Jane carefully documented how many of the funds were not explained and were taken out via personal checks or unidentified ATM withdrawals. In total, while Jane conceded that $25,000 of the proceeds were likely used for marital expenses, she argued that the rest were not clearly used for both of their benefits.
The court repeatedly suggested that Leslie provide more information concerning the outstanding $50,000, but he was unable to provide specific documentation or receipts. Since the court could not ascertain exactly what had happened to that money, it made the decision to split it in half, assuming that $25,000 was used for marital expenses, while the remaining $25,000 was not and was credited against Leslie in distributing the remaining assets. Leslie appealed this outcome.
On appeal, Leslie argued that the way the court handled the outstanding $50,000 was an erroneous exercise of its discretion. He noted that he had testified under oath that more than 95% of the money received from the IRA went to marital expenses. The Court of Appeals acknowledged this testimony but also acknowledged Jane’s credible evidence that Leslie’s bank account and documents did not account for a good portion of the money that was withdrawn. Had Leslie been able to provide documentation to support his testimony, the Court of Appeals noted that it might have found the testimony more credible and been less inclined to “split the difference” as it did. But under the circumstances, and unable to definitively determine how the money was used, the trial court decided to apply a compromise that partially benefited both parties. The Court of Appeals held that this was not an erroneous exercise of discretion.
When accounting for assets in a divorce, the best offense and defense often is documentation. Without proof of assets, accounts, and expenditures, it will be difficult to get a court to understand and accept your financial position. If you are considering divorce, you may want to consult with an experienced Milwaukee divorce attorney prior to filing so that you can take the time to pull together all of the documentation that you will need. To speak with a knowledgeable divorce lawyer today, do not hesitate to contact the law offices of Reddin & Singer, LLP online or give us a call at 414-271-6400.