What Is Dissipation of Assets in a Tennessee Divorce, and How Do You Prove It?

Dissipation of assets in a Tennessee divorce happens when one spouse wastes marital money frivolously, without justification, for a purpose unrelated to the marriage, at a point when the marriage is breaking down. Tennessee law lists it as a factor judges weigh when dividing property under Tenn. Code Ann. § 36-4-121(c)(5). You prove it in two steps: first you show the money was spent, then the burden shifts to the spouse who spent it to justify where it went.

That burden shift is the part most people miss, and it is what makes these claims winnable.

What Is Dissipation of Assets in a Tennessee Divorce?

Tennessee’s appellate courts have described the idea plainly: dissipation is based on waste. In Altman v. Altman, the Tennessee Court of Appeals held that dissipation occurs when one spouse uses marital property frivolously and without justification, for a purpose unrelated to the marriage, at a time when the marriage is breaking down.

A later case, Larsen-Ball v. Ball, added that dissipation is often intended to hide, deplete, or divert marital property once a marriage is beyond saving.

Three elements matter:

• The money was marital property
• The spending was wasteful and served a purpose outside the marriage
• The timing lines up with the breakdown of the relationship

Miss any one of those and the claim usually fails.

What Is the Difference Between Dissipation and Ordinary Spending?

This is where most dissipation claims are won or lost. Tennessee courts have to separate dissipation from ordinary discretionary spending, and the distinction is not about whether the purchase was smart.

A spouse who has bought a new truck every three years for twenty years and buys one during the divorce is spending the way that marriage had spent all along. Ill-advised is not the same as wasteful. But a spouse who has never gambled and drops $60,000 in a casino the month after separation is doing something new, and that pattern break is the point.

Courts look at four things:

• How typical the spending was for this particular marriage
• Who benefited, the marriage or only the spouse doing the spending
• How close in time the spending was to the marriage falling apart
• How much money was involved relative to the size of the estate

How Do You Prove Dissipation in a Tennessee Divorce?

The burden works in stages, and knowing the sequence changes how you build the case.

1. You carry the initial burden. The spouse claiming dissipation has to establish a prima facie case, meaning credible proof that marital funds were spent.
2. Then it flips. Once that showing is made, the burden shifts to the spouse who spent the money to produce evidence that the spending was appropriate. Receipts, invoices, statements, and records that independently back up the stated purpose.
3. The court applies a two-part test. First, does the evidence actually support the claimed purpose of the spending? Second, does that purpose amount to dissipation under the circumstances?

Proving money left the account is often easy. The harder work is documenting the pattern, which is why these cases lean on:

• Bank and credit card statements across the months before and after separation
• Records of cash withdrawals, transfers, and payment app activity
• Business records, if funds moved through a company
• A forensic accountant to reconstruct the flow of money

Tennessee appellate decisions have reduced dissipation awards when the spouse raising the claim did not carry that first burden with real proof. Documentation beats accusation every time.

What Are Common Examples of Dissipation?

Patterns that show up repeatedly in Tennessee cases include:

• Spending marital funds on an affair, including travel, gifts, rent, or a joint account with a third party
• Gambling losses that break from the couple’s history
• Unusually large gifts or “loans” to family members or friends
• Transferring property to a relative to move it out of the marital estate
• Substance abuse spending
• Risky speculative trading with marital funds. In one Tennessee case, a spouse’s short-term stock trades that lost roughly $170,000 were treated as dissipation.

The timing matters as much as the category. The same expense that raised no eyebrows during a healthy marriage can look very different once the marriage is ending.

What Can the Court Do About Dissipated Assets?

Judges have practical remedies, even though the money is already gone:

• Treat the wasted funds as if they still existed. The court can add the dissipated amount back into the marital estate on paper and award the other spouse an offsetting share of what remains.
• Adjust the overall split. Dissipation is a statutory factor in property division, so it can shift the entire percentage.
• Find contempt. Spending that happens after filing may also violate the automatic injunction under Tenn. Code Ann. § 36-4-106(d), which bars both spouses from transferring, concealing, or dissipating marital property. Tennessee courts have found spouses in contempt for exactly this.
• Assign fees. The cost of proving the claim can land on the spouse who caused it.

Frequently Asked Questions

Does dissipation only count after we separate?

No. What matters is whether the marriage was breaking down when the spending happened, which can begin before anyone moves out or files.

Is a bad investment dissipation?

Usually not on its own. Courts separate poor judgment from waste. Speculative bets made with marital funds as the marriage collapses are a different story.

How much money does it take for a court to care?

There is no threshold. The amount is weighed against the size of the marital estate, so a modest sum can matter in a smaller estate.

Can dissipation affect alimony too?

It can factor into the broader financial picture, including spousal support, since the court looks at each spouse’s resources and conduct.

How to Raise a Dissipation Claim the Right Way

Dissipation claims succeed on documentation and timing, not outrage. The records you need are easiest to obtain early, and every month that passes makes the pattern harder to reconstruct. As of 2026, dissipation remains a statutory factor Tennessee judges must weigh in dividing marital property.

Our team at the Law Office of Sam Byrd helps Chattanooga clients build these claims with the records that hold up, and defends against claims that do not. Schedule a confidential consultation to talk through your situation. You can also learn how we approach divorce and cases involving a family business.