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Dissipation of Marital Assets: A Closer Look

A common question asked of divorce attorneys is “Can my spouse withdraw from his or her retirement account, then spend all the money and get away with it?”  

In a previous article about dissipation of marital assets in an Illinois divorce, I explained the basic idea of what might occur if a spouse improperly uses or wastes marital property or funds.  This article will go into more depth as to some of the factual requirements for making a dissipation claim. 

Basic Requirements for a Dissipation Claim

 Generally, dissipation could be found to occur when:

1. A spouse improperly uses marital property for the sole benefit of him or herself, for a purpose unrelated to the marriage, without the permission and/or knowledge of the other spouse; and
2. The improper use occurs during a time period when the marriage was undergoing an “irreconcilable breakdown.”

Was the Property Really “Dissipated?”

Perhaps the most common dispute in dissipation claims is over whether the spending of marital property was wasteful, or whether it was a legitimate, appropriate use. 

Here is a common scenario:  Spouse A withdraws large amounts of money from a savings, retirement or investment account, such as an IRA, then spends it on bills, food, and clothing during divorce proceedings.  Spouse A claims that the funds were used for “regular household expenses,” while Spouse B claims that the money was spent so that it would not have to be shared when the divorce is finalized.  Their divorce lawyers then review bank account statements to look for signs of waste or unusual spending patterns.

Whether or not a court will find that a spouse dissipated marital property will depend on the specific facts of each case.  Dissipation is generally based on the idea of “waste.”  Unusual expenditures that do not benefit “common marital interests” could be held improper.  Here are some examples of potential dissipation:

• Spending money on an extra-marital boyfriend or girlfriend, such as buying expensive jewelry, or paying off his or her debts
• Loss of marital funds though gambling
• Intentional destruction of property
• Failing to pay the mortgage on a house, causing it to go into foreclosure, and resulting in a loss of equity in the home
• A pattern of giving gifts or donations which were not agreed to, and were not typical during the marriage
• Using savings or investment account money to pay household expenses, when the parties had enough available income to pay these expenses
• An increased level of expenditures that was not agreed to or typical during the marriage

A spouse properly charged with dissipation must present clear and convincing evidence that the expenses were legitimate.  To survive the dissipation claim, he or she cannot simply state that marital funds were spent on regular or necessary expenses.  A detailed accounting of financial records, or in-court testimony may be required for the accused spouse to prove that the use of marital property was not selfish or wasteful.

The Irretrievable Breakdown of the Marriage

Another potential issue is the timing of when the improper acts or expenditures occurred.  The key point in the time line is the period when the marriage began to undergo an irretrievable breakdown.  If the improper use of the marital property occurred during or after this period, then the court could find that it was dissipation.  Courts in the past have defined the key starting point as the time when the marriage began to undergo an irreconcilable breakdown, and not the time when the marriage had reached its  “final breaking point.”

Some examples of potential starting points for an “irretrievable breakdown” are the following:

• The date when the divorce was filed. The breakdown could certainly occur before this, but when a spouse files for divorce they typically allege in the initial divorce papers that an irretrievable breakdown has occurred.
• The date when a spouse moved out of the marital home
• The date when the spouses began sleeping in separate bedrooms

The court’s evaluation of whether dissipation has occurred, and the outcome of a dissipation claim can depend on the specific circumstances and facts of each divorce case.  If you believe you may have a dissipation claim against your spouse, or your spouse is alleging a claim of dissipation against you, contact a divorce attorney to schedule an initial consultation at (815) 207-9570.  Navarro Family Law, LLC represents clients in Will County, Dupage County, and Kendall County divorce cases.

Call to schedule an initial consultation

(815) 207-9570

Related Articles:

Dissipation of Marital Assets in an Illinois Divorce

How is Property Divided in an Illinois Divorce?