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| Home > Divorce Q&A's: (sect-Property issues in divorce) > Dissipation in Illinois Divorce Cases | |||||
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Dissipation in Illinois Divorce CasesThe Gitlin
Law Firm, P.C., Woodstock, Illinois © 2009
Q:What is “dissipation”?A:Dissipation is generally defined as the use of marital funds by one party solely for their own benefit, for a purpose unrelated to the marriage. Dissipation is limited to the time period at a time period where the marriage is undergoing (or has undergone) an irretrievable breakdown. Dissipation generally reduces the amount of marital property which the court can divide between the parties because the dissipated property is essentially awarded to the party who was responsible for the use or expenditure of marital funds.
Q:What factors will the court look to in determining whether there is dissipation -- once the court determines that the expenditure of funds after the time period you referred to?A: There are a number of considerations for the court in determining whether dissipation exists --besides looking only to the time-frame. The court may examine whether the expenditure was for the benefit of the marriage, whether the expenditure was excessive, and whether the dissipating party intended to hide, deplete or divert the marital assets and whether the other spouse agreed or acquiesced in the expenditure. Generally funds which are spent on necessary and legitimate living expenses will not constitute dissipation.
Q:What are “marital funds” in terms of dissipation?A:“Marital funds” can include employment income, income received from investments, etc., as well as funds removed from marital accounts (IRAs, 401(k)s, savings accounts, CDs, etc.). If the funds (including earnings) were earned or accumulated during the marriage, they are presumed to be marital in nature. This presumption can be rebutted if, for example, the funds were received during the marriage, but were received via gift, inheritance, etc.
Q:When does the “breakdown of the marriage” occur?A:The timing of the breakdown of the marriage is often a great source of contention in terms of dissipation. Many people believe the “breakdown” occurs the day the divorce case is filed. This is not necessarily true. Others believe the date of the breakdown of the marriage is upon separation – if it the parties separate before the divorce. It is possible, however, the court determines that the marriage had undergone an irretrievable breakdown, even before both the separation and the filing of a divorce. The facts and circumstances of the individual case are critical. A marriage tends to breakdown prior to the date of filing the divorce case. Proof of this time period is not always a "black and white" proposition. This fact can be perhaps best emphasized by a 2008 decision which emphasized that the importance of the proof the the marriage"was undergoing" a marital breakdown rather than focusing on the "final straw" in the marital breakdown. See, Marriage of Holthaus, (Second District, November 18, 2008).
Q:Does it matter that I spent the money in question before the divorce case was filed?A:No. Illinois case law indicates that dissipation can occur before a divorce case is formally filed with the court.
Q:I gambled all the time before my wife filed for divorce. Now she’s saying the money I spent on gambling is dissipation. I say she’s wrong because that’s what I’ve always done. Who is right?A:To a certain extent, you are both right. Dissipation can occur even if the spending in question occurred throughout the marriage. However, the court is not likely to say all of the expenses throughout a marriage constitute dissipation. Instead, the court will examine when the marriage was undergoing an irretrievable breakdown to determine the extent of the dissipation.
Q:What is a “purpose unrelated to the marriage” in terms of dissipation?A:This is complicated because of the varying facts of each case. Generally, the most common form of dissipation is spending money on a girlfriend or boyfriend (i.e., buying gifts, taking vacations, buying dinners, etc.) as this is clearly not related to the marriage. Dissipation can also take the form of buying things for yourself which are not reasonable and necessary, such as expensive jewelry, expensive clothing, new cars, etc. Dissipation can also include mismanagement of a family business, excessive expenditures on hobbies, legal fees, expensive vacations, failing to pay mortgage payments, and gifts to relatives. This list, however, is not exhaustive.
Q:If I am paying temporary support to my spouse, isn’t the rest of my income “my money” to spend how I see fit?A:In Illinois the money is only your income after the divorce. This is because in Illinois marital property is divided as of the date of divorce – dissolution of marriage. Thus, during the divorce process the income of either party from their employment is generally marital in nature. (This Q&A does not address income from a non-marital business, etc.) A party can still be found to have dissipated funds even though that party is paying temporary support to his or her spouse. If a party is charged with dissipation, he or she must be able to account for the expenditures.
Q:How can my spouse find out how I spend my money?A:We live in an electronic world. Almost every transaction you make is recorded electronically and in many cases it is relatively easy to construct a paper trail. Either spouse is entitled to review certain documents during the discovery process. Your spouse can ask you to produce credit card statements, receipts, bank statements, canceled checks, etc. during the discovery process. Your spouse can also issue subpoena to your bank(s), employer, etc. The paper trial is most often the easiest way to track dissipation, and your spouse can “connect the dots” once this information is provided.
Q:Does dissipation apply to unmarried parties?A:In terms of a “family unit” dissipation is a claim which can be made only between married parties. Unmarried parties in a paternity case, for example, cannot claim dissipation against one another. Divorced parties cannot claim dissipation against each other once the divorce is final.
Q:I removed $5,000 from a joint savings account. My spouse claims I dissipated the funds, but I do not believe she can prove anything against me. Will the court deny her claim because she cannot prove her allegation?A:Once a claim of dissipation is made, the burden of proof shifts to the party against whom the claim is made. The party accused of dissipation has the burden to prove by clear and convincing evidence how the funds were spent without the use of general and vague statements. Thus, in the above example, the person who removed the $5,000 would have to account for the funds (i.e., show where the funds are, how they were spent, etc.) and show that if any of the money was spent, it was not spent on a purpose unrelated to the marriage. He or she cannot simply state that the funds were spent on “living expenses” or other vague references.
Q:If the court finds that I dissipated funds, what can the court do to me?A:The court has discretion in terms of dissipation. . If the person accused of dissipation cannot convince the court the expenditures were appropriate the court can compensate the other party by awarding him or her an additional portion of the marital estate. The court can order the dissipating spouse to “pay back” the marital estate in an amount equal to all or some of the amount dissipated. The Gitlin Law Firm, P.C., provides the above information as a service to potential and current clients. A person's accessing the information contained in this web site, is not considered as retaining The Gitlin Law Firm for any case nor is it considered as providing legal advice. The Gitlin Law Firm cannot guarantee the outcome of any case. The Gitlin Law
Firm, P.C. Gitlin Law Firm, P.C. Updated: January 2, 2009
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