Kentucky Bankruptcy Law

Counsel with Care

Fraud or dissipation of assets and divorce

The Kentucky Supreme Court just issued its decision in Gripshover v. Gripshover, (2005-SC-000729-DG & 2006-SC-000258-DG)(Feb. 21, 2008)(to be published). There is a pretty extensive factual background in the published opinion, but unless you either enjoyed reading cases in law school or aspire to enjoy reading cases in law school, I will focus on some key rulings in the case.

Unfortunately, there are spouses who, when they begin contemplating a divorce, engage in fraudulent maneuvering to hide away assets. This can take the form of transferring property belonging to the marital estate so as to exclude it as marital property in the impending divorce. When this dissipation of marital assets occurs, the trial court can recharacterize assets or pull them back into the marital estate in determing a “just” distribution of property.

In Gripshover, the wife alleged that real property transferred into a limited partnership and other property transferred into a trust defrauded her of her marital interest. The Supreme Court disagreed. For a finding of fraud or dissipation, there has to be evidence that the transfers were made in contemplation of divorce and with the intent to impair the other spouses interest. In this case, no such evidence was produced.

While I do not advocate suspicion within a marriage, it is important for both spouses to be understand the ramifications of significant transfers of property. So, I do advocate both spouses being engaged in the finances of the family.

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February 23, 2008 - Posted by | dissipation of assets, Divorce, Family Law, Fraud, property allocation | , , ,

4 Comments »

  1. You seem very proud of the wife getting defrauded of
    her commuity property. I was defrauded myself of my
    community property by a nasty attny like you. How can
    you pride yourself for ripping women and children off?

    Comment by colleen | July 13, 2009 | Reply

    • Wow – when I read this comment, I had to go back and read the original post. I must say, even on the second and third read, I saw nothing of what you are talking about (pride that someone was harmed) only an explanation of how the Supreme Court viewed such things. I hope you are able to get the assistance you need to recover from what happened in your divorce. Also, just because an attorney writes about a case, it does not mean that person had anything to do with the matter. It only means they took the time to read a published decision and provide information for free to readers.

      Comment by Elusive Justice | July 13, 2009 | Reply

  2. I’m going through one and my husband of 28 yrs is doing the same thing hiding all our business assets so I get nothing, I’m a disable women and unable to work and the judge is favoring in his side and my lawyer will not go after the proof of him hiding asset in his mistress name when it’s all there. I have the proof and the judge is just turning her head to it. here he makes 750.000. a yr and he is claiming poverty,and the judge said to my husband you might want to look in to bankruptcy due to him saying he is not making any money on top of this she says to him that you might want to just go get a job that has w2’s and this judge wants to give me support of only 1800.00 a month with no assets. I mind you that because of me not working due to he didn’t want me and the 5 yrs I did in my whole life I don’t qualify for any SS and or SSD It sicken me to see that men these days are so evil.

    Comment by Stephanie | February 11, 2010 | Reply

  3. Does anyone have any advice? I was living with my soon to be husband in Dec. 2000. We married in April 2001. He purchased a lot in Oct. of 2000. We started building the summer home in February or 2001. It was only built on the outside and he finished all the work on the inside while I was expecting and after our first child was born. He claimed we were not intending to marry when I moved in. We were. It was not true. Is this Fraud?

    Comment by Elizabeth | May 23, 2011 | Reply


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