“Marital Waste Claims” typically apply to an overspending spouse enjoying shopping sprees or placing risky gambling bets in amounts higher than your anticipated limits. It also applies to spending community funds on drugs, alcohol, and while engaging in an extramarital affair. The standard for “Waste” however, is not just reckless or careless spending. The Waste standard is more complicated. For this spending to be considered Waste by the court, the financial disregard must be done without the knowledge of the other spouse.
Often, the “innocent” spouse is fully aware that their partner is not a responsible spender. In these cases, it generally does not meet the Waste Claim’s legal standard. But, when the spouse is spending money on things like hidden affairs, secret gambling addictions, and/or major negative business risks you may have the opportunity to pursue a Waste Claim and seek reimbursement in your divorce.
A.R.S. § 25-318(A) requires the family court to divide the community estate “equitably.” Further, “this section does not prevent the court from considering … excessive or abnormal expenditures …” Most Waste claims generally fall under Adultery, Alcohol, or Addiction. But Waste Claims are not limited to affairs, gambling problems, alcoholism, or drug addictions. In one Arizona case, the wife was found to have committed Waste when she lost $600,000 in artwork and other valuables that were exclusively in her possession. In another case, the husband committed Waste by not sharing with wife the proceeds of the sale of an airplane.
A community (or martial) Waste Claim can cover a broad range of financial situations. The person pursuing the Waste Claim must show that the expenditure is abnormal or excessive. The spouse claiming Waste must provide sufficient evidence to show waste occurred. The burden then shifts to the other spouse to prove that the expenditures benefited the community.
If successful on a Waste Claim, the Court essentially reimburses the innocent spouse for the wasteful spouse’s overspending by awarding that spouse a larger portion of the community property.