Dissipation and Divorce

What is dissipation?

Dissipation is the spending of marital funds, for a purpose that is not for the benefit of the marriage, during the time period after the breakdown of the marriage and the finalization of a divorce. In every marriage, there is a “marital estate” and when assets are spent in a way that constitutes dissipation, the non-dissipating spouse is entitled to receive the marital share of the portion spent by the dissipating spouse. ILCS 5/503(d)(2) briefly discusses dissipation and also lists it as a factor that a court will consider in the division of marital property.

What is considered “not for the benefit of the marriage”?

The phrase “not for the benefit of the marriage” can create some gray area as to what constitutes dissipation. Excessive spending, such as lavish dinners or vacations, gambling, alcohol and drug purchases, and expenses spent towards a significant other are all clear examples of dissipation. Dissipation does not necessarily mean spending cash, it also can include other assets, for example if one spouse does not pay the mortgage on a marital property, and there are financial repercussions as a result.

What constitutes dissipation will also be dependent on the lifestyle that the parties maintained throughout the marriage and the income of the parties. Expenditures for legitimate family expenses which are necessary and appropriate cannot be dissipation. This means that if parties maintained a high standard of living throughout the marriage with a great deal of expenses, it is less likely there will be a finding of dissipation when this same level of spending is maintained.

How do I determine when the breakdown of the marriage occurred?

For purposes of dissipation, the potential to dissipate assets only arises after the irretrievable breakdown of the marriage. Determining when the breakdown of the marriage occurred can be more difficult in some cases than in others. Generally, the breakdown of the marriage can be classified as the date of the filing of the Petition for Dissolution of Marriage by one of the parties. However, a party may still be able to prove that a breakdown occurred before the filing if one party moved out of the marital residence, the parties ceased communicating, or if there is such a high level of conflict that a breakdown of the marriage is inevitable. Determining if there is a breakdown of the marriage is subjective and absent the parties agreement as to the date of the breakdown, it is a fact that may need to be proved to the court through evidence.

What is the process of determining if my spouse is dissipating assets?

The first step in determining dissipation is by accessing the bank statements, credit card statements, or other financial documents through discovery. See more about the discovery process at the article linked here. Occasionally, additional documents are required, either because of a lack of access or by refusal to tender documentation from the dissipating spouse. When this occurs, subpoenas may be issued in order to receive the additional financial documents necessary to determine the extent of dissipation. Once the financial documents are received, they are analyzed in order to track spending and note where money is being spent in a manner inconsistent with the marriage status quo or inappropriately. After the total amount of dissipated assets is determined, a Notice of Dissipation is filed detailing the amount spent. If over time more dissipation occurs, additional notices may be filed to update the total amount. If there is a dispute as to the amount of dissipation and parties are unable to agree to an amount, it will be heard at trial or a hearing in front of a judge.

How can I avoid dissipation?

Although you cannot control the actions of your spouse, you are able to control your own actions to ensure that you do not intentionally or accidentally dissipate marital assets. The first way to ensure that you are not dissipating assets is to keep the marital status quo of spending and maintaining assets. Continuing to make regular mortgage payments, credit card payments, and other common expenses will not constitute dissipation. Keeping expenses as close as to what they were during the marriage is the best way to avoid dissipating assets. Steer clear of spending on significant others, taking excessive vacations, and gambling.

NOTICE: This blog is intended solely for informational purposes and should not be construed as providing legal advice. Please feel free to contact us with any questions you may have regarding this blog post.