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What is economic misconduct and how does it affect property division?

On Behalf of | Sep 26, 2023 | Property Division

Under Hawaii marital property laws, courts divide marital assets equitably between spouses based on certain factors, including each spouse’s age, health, skills, employability, current financial condition, law violations, if any and whether dependent children are involved.

However, this list of considerations is not exclusive. When dividing property during a divorce, courts can also review other unique case circumstances, such as the economic misconduct of a spouse.

Understanding the concept

If a spouse waste or lose marital funds or properties through acts like gambling, excessive spending, substance abuse and similar behavior, they are guilty of economic misconduct or, in legal terms, dissipation of assets.

Why do courts consider it a factor in property division?

Hawaii spouses have equitable rights over assets acquired during their marriage. Accordingly, the law expects them to use the marital properties to benefit the marriage and the family. If one spouse wastes or loses part of the marital assets because of their misconduct, they are violating the property rights of the other spouse.

Hence, courts may consider economic misconduct to protect the rights of the wronged spouse and award them with a higher percentage of the marital assets as a punitive or restorative action.

How do the courts determine what percentage to award?

There is no fixed formula for courts to determine how much of the marital assets they will award one spouse for the economic misconduct of the other. Generally, courts consider the unique facts and circumstances of each case to produce a fair and equitable share.

Property division is undeniably a complex process in a divorce. The existence of economic misconduct during the marriage can complicate the process even more. Nevertheless, parties can avoid stressing about it as long as they know their rights and available legal protection.

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