Can Losing Money in the Stock Market Count as Marital Waste in Divorce?

Dividing property in an Ohio divorce is rarely simple. Tensions rise quickly when one spouse makes risky stock market investments and the money disappears. Clients often ask us: Can I argue that my spouse’s bad investing was “marital waste”? The answer depends on intent, disclosure, and risk level.

What Is Marital Waste in Ohio Divorce?

Ohio law allows a court to compensate one spouse if the other engages in financial misconduct (Ohio Revised Code 3105.171(E)(4)). This includes:

• Dissipating or squandering marital assets,

• Hiding or destroying property, or

• Using money for non-marital purposes (such as gambling, affairs, or addictions).

The critical issue is intent—was the money lost due to bad faith, secrecy, or was it just a normal financial risk?

Stock Market Losses: Misconduct or Just Bad Luck?

Not every bad investment equals marital waste. Courts recognize that investing comes with ups and downs.

• In Jacobs v. Jacobs (2003), the court explained that “investing, even poor investing, is neither wrongdoing nor financial misconduct.”

• In Tate v. Tate (2018), a husband lost more than $146,000 in the stock market. The appellate court reversed a misconduct finding, stressing that losses alone do not prove bad faith.

So, if your spouse put money into stocks with the genuine belief it would help the marriage—even if it tanked—that’s usually considered part of the marital estate’s risk.

When Risky Investments Become Marital Waste

There are situations where stock market losses do cross the line into misconduct:

• Extreme recklessness – such as day-trading meme stocks that no reasonable investor would make.

• Concealment or secrecy – investing behind the other spouse’s back, draining accounts without disclosure.

• Non-marital purposes – diverting funds to cover personal debts, addictions, or affairs.

In these cases, courts may order an unequal property division to compensate the innocent spouse.

What This Means for Your Divorce

If your spouse lost money in the market, you’ll need to show more than a bad trade to prove misconduct. Courts look closely at:

• How risky the investment was,

• Whether there was disclosure or secrecy, and

• Whether the loss served a marital or non-marital purpose.

An experienced Ohio divorce attorney can help you determine whether the investment loss is likely to be treated as marital waste or simply as a shared marital loss.