By Joey N. Friedman, CPA, ABV, MAcc, MIB — President, Joey Friedman CPA PA. This article is published by Joey Friedman CPA PA, a Florida professional association. All forensic accounting, business valuation, expert witness, and litigation support services described herein are provided by Joey Friedman CPA PA. Mr. Friedman’s professional credentials and experience are exercised in his capacity as an officer, agent, and licensed CPA practicing under and on behalf of Joey Friedman CPA PA.
Quick Answer
Dissipation of marital assets is the deliberate or reckless use of marital funds for non-marital purposes after a marriage has irretrievably broken down. Under Florida Statute §61.075(1)(i), proven dissipation can justify an unequal property distribution. A forensic CPA detects it by establishing a baseline spending pattern, identifying anomalies, tracing the flow of funds, and quantifying the loss with reasonable certainty — producing a defensible report that survives cross-examination in mediation, deposition, or trial.
When a marriage starts unraveling, one spouse sometimes starts spending. Cars are bought, accounts are emptied, businesses begin showing unusual losses, and money flows to people or purposes the other spouse never saw before. By the time the divorce petition is filed, hundreds of thousands of dollars may already be gone.
This is dissipation — the deliberate or reckless use of marital assets for non-marital purposes, typically during the period when the marriage has irretrievably broken down. Under Florida law, dissipation can be a basis for an unequal division of marital property, but only when it is documented, traced, and quantified by someone whose work product can survive cross-examination.
That work is forensic accounting. This article explains what dissipation looks like in practice, how a forensic CPA detects and quantifies it, what records are needed, and what attorneys should expect from a properly scoped engagement.
What Counts as Dissipation Under Florida Law
Florida courts have recognized dissipation as a form of marital misconduct that can justify an unequal distribution of marital property under §61.075(1)(i), Florida Statutes. The statute lists “the intentional dissipation, waste, depletion, or destruction of marital assets” as a relevant factor in equitable distribution.
To establish dissipation, the moving party typically must show:
- The spending or transfer occurred during the marriage but after the marriage was clearly broken down
- The expenditure was for a non-marital purpose
- The amount can be quantified with reasonable certainty
- The asset was a marital asset at the time it was used
Several Florida appellate decisions — including Beers v. Beers, Roth v. Roth, and Heinrich v. Heinrich — have shaped how courts evaluate dissipation claims. The common thread: the more contemporaneous and well-documented the financial trail, the more credible the claim.
What Dissipation Actually Looks Like
In practice, dissipation rarely shows up as one large obvious withdrawal labeled “Take Marital Assets Out of Reach.” Instead, it accumulates through patterns that look reasonable in isolation but are damning in aggregate.
Lifestyle changes without explanation. A spouse who has flown coach for fifteen years suddenly starts booking business class and resort suites. The expenses do not appear on the joint credit card — they run through a personal card the other spouse never sees, or through the business as “client entertainment.”
Cash withdrawals that disappear. ATM withdrawals in $400-$500 increments, multiple times per week, with no corresponding documented purchases. Over twelve to eighteen months, this can compound to $40,000-$70,000 of unaccounted cash.
Gifts and transfers to relatives or friends. Money flowing to a parent, sibling, or close friend — often documented as a “loan” — but with no repayment schedule, no signed note, and no evidence the recipient was ever expected to repay.
Business changes that benefit one spouse. A closely-held business suddenly reports declining revenues just before the divorce filing. Owner compensation drops, dividends stop, and the business begins making large “expense” payments — often to vendors that look unfamiliar or have no clear connection to the company’s operations.
Speculative or destructive expenditures. Cryptocurrency purchases at the top of a bubble, large gambling losses, expenses on a new relationship (gifts, travel, housing), or aggressive home renovations that primarily benefit the dissipating spouse.
Asset transfers titled away from the marital estate. Vehicles re-titled to family members. Investment accounts retitled to a trust. A second home transferred to a parent “for estate planning reasons.” Each transfer needs documentation showing fair consideration was given — and often, no such documentation exists.
How a Forensic Accountant Detects Dissipation
A forensic CPA approaches a suspected dissipation case the same way a financial investigator approaches any fraud examination: by reconstructing the financial history of the parties from documented sources, identifying anomalies, and quantifying the unexplained flows.
Document collection and reconstruction. The forensic accountant requests at least three to five years of bank statements, credit card statements, brokerage and retirement account statements, tax returns, business financial statements, and any other source records that document the spending and asset movement patterns. For closely-held businesses, this extends to the general ledger, payroll records, and major vendor invoices.
Baseline establishment. Before the marriage broke down, what was the household’s normal spending pattern? What was the typical cash withdrawal rate? What did the business pay its owners and what were its typical major expenses? This baseline becomes the reference point against which subsequent anomalies are measured.
Anomaly identification. Once the baseline is established, the forensic accountant identifies departures: spending categories that spiked, new transfer patterns that emerged, vendors who appeared without precedent, or accounts that began draining without explanation.
Tracing the funds. For each suspected anomaly, the forensic accountant traces the flow of money from origination through every intermediate account to its final use or recipient. Bank deposit analysis, source-and-use schedules, and account reconciliation are the standard tools.
Quantification. Once the trail is documented, the accountant calculates the total amount of marital assets dissipated, accounting for any legitimate offsets (e.g., ordinary household expenses paid from those same accounts) so the quantified claim is defensible.
Records Attorneys Should Request Early
Successful dissipation analysis depends almost entirely on having the right records. Counsel should request these as early in discovery as possible — ideally through initial disclosures and targeted subpoenas — so the forensic accountant has a complete picture before deadlines narrow the options.
For each spouse individually:
- Federal and state tax returns for at least 5 years (personal and business)
- All bank and credit card statements (joint, individual, business)
- Brokerage and retirement account statements
- Loan applications (mortgage, line of credit, business loans) — these often include financial disclosures that contradict later positions
- Lifestyle documentation: vehicle records, club memberships, travel records, large purchases
For closely-held businesses:
- Income statements and balance sheets for 5+ years
- General ledger detail
- Payroll records
- Major vendor invoices and contracts
- Shareholder/partner agreements and amendments
- Distributions and dividends history
For real estate and major assets:
- Deeds, mortgage statements, and title documents
- Appraisals
- Records of any transfers (especially within the marriage period)
The forensic accountant will identify additional records based on what the initial analysis surfaces. Partial production is acceptable as a starting point — the gaps themselves can be diagnostic.
What a Defensible Dissipation Report Looks Like
A dissipation report that holds up in mediation, deposition, or trial typically includes:
A clear statement of scope. What was the engagement, what records were reviewed, what limitations exist, and what assumptions the accountant relied on.
A documented timeline. When did the marriage begin to break down (often a contested question in itself)? What is the relevant analysis period? What baseline period was used for comparison?
Schedule of identified dissipation. A detailed, transaction-level schedule showing every disputed expenditure or transfer, the source account, the destination, the supporting document reference, and the accountant’s basis for concluding the expenditure was dissipative.
Quantified total. The bottom-line dollar amount of marital assets the accountant concludes were dissipated, with appropriate ranges where exact quantification is not possible.
Methodology disclosure. A clear explanation of how the accountant identified the anomalies, traced the flows, and quantified the loss — written in language a judge or jury can follow.
Supporting exhibits. Source-document copies (or summaries with references), flow-of-funds diagrams, and any analytical schedules that support the conclusions.
Common Defenses to Dissipation Claims — And How a Forensic Accountant Addresses Them
Opposing counsel and their experts typically raise several defenses to dissipation claims. A well-prepared forensic accountant addresses each in the analytical framework:
“This was an ordinary expense, not dissipation.” The accountant compares the disputed expenditure to the established baseline. If a spouse who historically spent $500/month on travel suddenly spends $5,000/month, the increase — not the total — is the dissipation measure.
“The marriage hadn’t broken down yet.” This is a factual question for the court, but the forensic accountant should be prepared to identify the date(s) of separation, filing, or marital breakdown that frame the analysis period.
“The funds were marital and either spouse could spend them.” True for ordinary marital purposes. Dissipation requires a non-marital purpose. The accountant’s job is to document the destination and use, then let counsel argue the legal characterization.
“There’s no proof of intent.” Florida law does not always require proof of intent — reckless waste can also qualify. The accountant’s documentation supports the legal argument by showing the pattern, regardless of stated intent.
When to Engage a Forensic CPA for Dissipation Analysis
The earlier the better. Once a divorce petition is filed and discovery deadlines begin running, the time available to thoroughly trace dissipation patterns compresses quickly. Engaging the forensic accountant in the initial discovery planning phase allows for:
- Targeted document requests (the accountant knows what records will be most diagnostic)
- Proper subpoena scope (covering not just the spouse’s individual accounts but also business accounts, third-party recipients, and entities to which transfers may have been made)
- Early identification of records gaps that may require additional subpoenas
- Sufficient time for thorough analysis before mediation or trial deadlines
Late retention forces reactive analysis under pressure — and reduces the credibility of the resulting report.
Why an ABV-Credentialed CPA Adds Weight
For dissipation claims that intersect with business valuation (a common pattern — one spouse may dissipate by running expenses through the business), an accountant credentialed in both forensic accounting and business valuation can address the full analysis without bringing in multiple experts. The AICPA’s Accredited in Business Valuation (ABV) credential signals that the accountant has met the AICPA’s standards for valuation work in addition to forensic skills — and the dual perspective is often necessary to fully characterize dissipation that affects the value of marital business interests.
Frequently Asked Questions
What is dissipation of marital assets?
Dissipation of marital assets is the use of marital property — money, investments, real estate, business value — for non-marital purposes, typically during the period when the marriage has irretrievably broken down. Under Florida law (§61.075(1)(i)), proven dissipation can justify an unequal distribution of remaining marital property.
How long before the divorce filing does the analysis period typically cover?
There’s no fixed rule. The analysis period typically begins when the marriage is shown to have irretrievably broken down — which may be months or even years before the formal filing. The court determines the relevant date based on evidence, and the forensic accountant adjusts the analysis accordingly.
Do you need to prove intent to claim dissipation?
Florida case law has generally held that intent is not strictly required — reckless or wasteful spending of marital assets, even without proven intent to harm the other spouse, can qualify. The forensic accountant’s role is to document the pattern; the legal characterization is left to counsel and the court.
How much does a dissipation analysis cost?
Costs vary based on the volume of records, the complexity of the financial picture, and the number of transactions analyzed. A focused analysis of a single suspect account over twelve months may be completed in twenty to forty hours of professional time. Complex cases involving multiple accounts, closely-held businesses, and offshore or untraceable transfers can require significantly more.
Can a forensic accountant trace cryptocurrency dissipation?
Yes. Cryptocurrency leaves a record on public blockchains, and forensic accountants who work with crypto can trace transfers between wallets, identify exchanges where funds were converted to or from fiat currency, and quantify the value at relevant points in time. The challenge is usually not the tracing itself but obtaining the records — which often requires targeted subpoenas to exchanges.
What if the dissipating spouse refuses to produce records?
Records can be subpoenaed directly from banks, brokerages, employers, and other third parties. The forensic accountant can work with counsel to identify the relevant institutions and frame the subpoenas. Where records are still incomplete, the accountant can use indirect methods — bank deposit analysis, net worth method, or expenditures method — to reconstruct the financial picture.
How is dissipation different from ordinary marital spending?
Ordinary marital spending supports the household, family, or both spouses jointly. Dissipation directs marital resources to non-marital purposes — gifts to a new partner, undocumented “loans” to relatives, gambling or speculative losses, or expenses on a parallel life the other spouse never knew about. The forensic accountant’s job is to document the destination and use of the funds so counsel can argue the legal characterization.
Can a forensic accountant testify as an expert witness on dissipation?
Yes. A qualified forensic CPA can prepare a written expert report, give deposition testimony, and provide trial testimony on the methodology, findings, and conclusions of the dissipation analysis. The work product should be documented in a manner consistent with applicable rules of evidence and prepared with the expectation that opposing counsel will challenge the analysis.
Working with a Forensic CPA on Suspected Dissipation
If you suspect a spouse has been dissipating marital assets — or if you are an attorney handling a high-asset divorce where dissipation is alleged — engaging a forensic accountant early is the most important step you can take. The records, methodology, and timeline all become harder to manage as discovery deadlines approach.
Joey N. Friedman, CPA, ABV, MAcc, MIB, in his capacity as President of Joey Friedman CPA PA, has extensive experience analyzing dissipation in Florida divorce cases, including high-net-worth matters involving closely-held businesses, cross-border transfers, and cryptocurrency. The firm’s work product is prepared to standards that survive deposition and cross-examination.
Contact the firm to discuss your specific matter and the records that would be most diagnostic for the situation you are facing.
About Joey Friedman CPA PA
Joey Friedman CPA PA is a Florida professional association providing forensic accounting, business valuation, expert witness, and litigation support services. The firm is led by Joey N. Friedman, CPA, ABV, MAcc, MIB, who serves as the firm’s President.
All services described in this article are provided by Joey Friedman CPA PA. Engagement letters and professional services are issued by the firm. Joey N. Friedman signs in his capacity as the firm’s President — as an officer and agent acting on behalf of Joey Friedman CPA PA, not in any personal or individual capacity. Mr. Friedman’s professional credentials — including CPA license, ABV (Accredited in Business Valuation, AICPA), and ACFE membership — are exercised under the firm.
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Disclaimer: This article is for informational purposes only and does not constitute legal, accounting, or tax advice. Engagement of Joey Friedman CPA PA is subject to a written engagement letter executed between Joey Friedman CPA PA and the engaging party. No attorney-client or accountant-client relationship is created by reading this article.
Related coverage from Joey Friedman CPA PA
- How to Find Hidden Assets in a Florida Divorce
- Can a Forensic Accountant Find Hidden Bank Accounts?
- Tracing Marital Assets Across Bank, Brokerage, and Crypto Accounts
- Lifestyle Analysis in High-Net-Worth Divorce
- Marital Property Division in Florida
About This Service
This article is part of Joey Friedman CPA PA’s broader practice in forensic accounting service overview. Visit the main service page for a complete overview of how we support attorneys, businesses, and individuals across Florida and nationally in financial disputes, litigation, and forensic engagements.
Related Coverage: Attorneys evaluating whether to engage a financial expert should also review our press feature on your divorce or business litigation case: why lawyers need an expert witness for the litigator-facing perspective on engagement timing.
Related Coverage: Dissipation claims under Fla. Stat. §61.075(1)(i) depend on accurate financial disclosure. See our companion analysis on Florida Financial Affidavit reviews for the methodology forensic CPAs use to reconcile reported income to primary-source records.