The dictionary definition of “dissipation” is waste by misuse, to spend or use wastefully or extravagantly, to squander, to deplete. The definition contained in the Illinois Marriage and Dissolution of Marriage Act refers to a spouse’s wasting of marital assets during while a marriage is undergoing an irretrievable breakdown. What does that mean?
In the case of Marriage of O’Neill, the court stated, “dissipation arises when property is improperly used for the sole benefit of one spouse, for a purpose unrelated to the marriage, at a time when the marriage is undergoing an irreconcilable breakdown.” If a spouse spends marital money frivolously on items or individuals not related to the marriage while the marriage is breaking down, the other spouse may make a claim for dissipation in a divorce. In many cases, this arises when one spouse spends marital money on an extramarital affair, extravagant travel, and/or expensive hobbies, none of which benefit the marriage or family. Often a spouse does not learn of his or her partner’s dissipation until the discovery or information-finding step in the divorce.
In a divorce case, as long as the court can exercise personal jurisdiction over both spouses, the family court will have authority to divide up the marital estate upon divorce. When the court is determining what would be a fair and equitable division of marital assets and debts to each party, the court may consider the spouses’ dissipation, or waste, of the marital estate.
Generally, the marital estate is made up of both assets obtained and debts incurred during the marriage. Illinois law specifically defines marital property as all property acquired during the marriage, except for those assets which are expressly excluded as non-marital property. Non-marital property typically includes property acquired before marriage or after a legal separation, gifts, inheritance, or other specific property excluded from the marital estate by a prenuptial agreement. Everything else is presumed to be marital in nature.
Illinois law sets forth specific rules limiting when dissipation of marital assets can be considered. First, a formal notice must be filed. This is accomplished by filing a document called a “Notice of Intent to Claim Dissipation.” If a spouse believes his or her spouse has dissipated their marital estate, he or she must sign this notice, file it with the court, and send a copy to the opposing party in the manner in which notices are served.
Second, there is a deadline by which the dissipation notice must be filed. Notice must be given no later than 60 days before trial or 30 days after discovery closes, whichever is later. If a spouse fails to give notice prior to the deadline, he or she will have waived any option to make this claim, and it will not be considered by the court.
Third, the notice of intent to claim dissipation must include specific allegations, including the date or time period when the marriage began undergoing an irretrievable breakdown, what specific marital property was allegedly dissipated, and the date or time period when the dissipation took place.
Fourth, regardless of when the marriage began to irretrievably break down, there are limits on how far back in time a dissipation claim may go. The Illinois Marriage and Dissolution of Marriage Act provides that “no dissipation shall be deemed to have occurred prior to 3 years after the party claiming dissipation knew or should have known of the dissipation, but in no event prior to 5 years before the filing of the petition for dissolution of marriage.” In other words, if more than 3 years ago, you found out that your spouse lost a fortune gambling with marital money, it will be considered irrelevant in the eyes of the judge. Similarly, regardless of when you found out about it, if it happened more than 5 years ago, it wouldn’t matter.
Fifth, the scope of dissipation is limited to the time period when the marriage was undergoing an irretrievable breakdown. A spouse cannot complain about money spent while the parties were happily married. Questions about when the breakdown actually began are often the subject of intense litigation. In contrast, dissipation which occurs after a divorce case has been filed is typically easy to prove.
Once a spouse has been charged with dissipating the marital estate, he or she has the burden to prove, by clear and convincing evidence, how the funds alleged to have been dissipated were spent. Clear and convincing evidence is a relatively high burden of proof. In the case of Marriage of Meadow, the court noted, “general and vague statements that the funds were spent on marital expenses or to pay bills are inadequate to avoid a finding of dissipation.”
If a spouse is found to have dissipated marital property, the court may order that spouse to reimburse the marital estate from any assets that are awarded to him or her in the divorce. Alternatively, whatever was deemed to have been dissipated may be deemed an advance of the dissipating spouse’s portion of the marital estate.
If you need help navigating the divorce process and dissipation may be a factor, contact the experienced legal professionals at Kollias, P.C. for a free consultation.