Facts: Husband and Wife divorced after approximately 25 years of marriage.

Wife presented evidence at trial that, during the four years the parties were separated, Husband deposited $1,131,738 into his accounts. Husband presented evidence that his expenses totaled $959,144 during that time. Thus, the sum of $172,594 was not accounted for.

Husband testified he had no “hidden money” and he had “given [Wife] every wage statement, checking account, credit card statement, [and] investment account.” Wife acknowledged receiving those documents from Husband and said she had reviewed each document.

The trial court found Husband did not dissipate the missing $172,594. The trial court made the following findings in its oral ruling from the bench:

This issue of dissipation has been bothersome to the Court. There are funds that I’m satisfied have not been accounted for. But on the one hand, there’s so much income coming in here and being used for legitimate purposes that I can’t find that [Husband] has willfully done anything that would be considered wasteful during the pendency of this divorce.

And that is, as has been pointed out, the concept of dissipation is based on the idea of waste. Can’t find that there’s anything in the proof that would support that he’s wasted any of their assets.

There is some question about where a big chunk of this money has gone, a sizable chunk, but I can’t find that there’s any proof that would support that it has been used for some purpose unrelated to the marriage and that it was used in a way for intentional or purposeful misconduct….

Wife appealed.

On Appeal: The Court of Appeals affirmed the trial court.

In dividing marital property, Tennessee courts must consider whether either party has dissipated any of the marital assets. Dissipation of assets requires a showing of intentional, purposeful, and wasteful conduct.

The burden of proof in showing dissipation is on the party making the allegation that marital funds have been dissipated.

A party alleging dissipation cannot meet his or her burden simply by arguing that “since he or she does not know how the money was spent, dissipation must have occurred.”

Courts must also differentiate between dissipation and discretionary spending. Courts must distinguish between what marital expenditures are wasteful and self-serving and those which may be ill-advised but not so far removed from “normal” expenditures occurring previously within the marital relationship to render them destructive.

After the party alleging dissipation establishes a prima facie case that marital funds have been dissipated, the burden shifts to the party who spent the money to present evidence sufficient to show that the challenged expenditures were appropriate.

After reviewing the record, the Court stated:

[O]n the record presented we see no need to alter the burden placed upon Wife to prove that Husband dissipated marital funds. Husband produced all information he had available, which Wife acknowledged that she received, and Husband was subjected to cross-examination on the same. The court implicitly found the any unaccounted for funds were used for purposes related to the marriage and for the children and not for purposeful or intentional misconduct; significantly, the court did not find that Husband had done anything that would be considered wasteful…. [T]he absence of an explanation for absent funds does not establish dissipation.

The record does not preponderate against the court’s determination that the money was used primarily for familial purposes and that no dissipation occurred by either party.

Accordingly, the trial court’s ruling was affirmed.

Pair v. Pair (Tennessee Court of Appeals, Middle Section, May 29, 2015).

Information provided by K.O. Herston: Knoxville, Tennessee Divorce and Family Law Attorney.