How to Protect Yourself From Dissipation of Marital Assets in Illinois

Have you ever wondered what happens when one spouse wastes marital funds right before or during a divorce? Maybe they gambled away savings, financed an affair, or made risky investments without your knowledge. In Illinois, this is called dissipation of marital assets, and it can drastically reduce your share of the marital estate.

But here’s the good news:  The law gives you options to protect your assets, but you need to know how to prove dissipation and follow strict time limits. In this guide, you will learn how Illinois courts define dissipation, the evidence you will need to support a claim, and how it could impact your divorce settlement.

Dissipation in Illinois Divorce: Legal Definitions and Criteria

In Illinois law, dissipation is generally defined as the use of marital funds or assets by one spouse towards non-marital expenses or towards expenses that clearly do not further common marital interests. Section 750 ILCS 5/503 of the Illinois Marriage and Dissolution of Marriage Act (IMDMA). Certain case law defines it as follows: “Dissipation is defined as the use of marital property for one spouse’s sole benefit for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.” In re Marriage of Tietz, 605 NE 2d 670 – Ill: Appellate Court, 4th Dist. 1992

Understanding and identifying dissipation during a marriage is critical for equitable division of the marital estate because dissipation depletes the marital estate and prevents one spouse from ultimately receiving their equitable share.

Section 503 of the IMDMA also sets forth the requirements, including the time period, for claiming dissipation by your spouse. Currently, the language in the statute now provides that one cannot claim dissipation for a period of more than 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.  The marriage also must be undergoing an irretrievable breakdown during the time the dissipation occurred.

Recognizing Dissipation: Common Examples in Illinois Divorce

Gambling Losses:

When a spouse uses marital funds for gamble at a casino, for on-line gambling, to buy losing lottery tickets, for sports betting, and all other gambling related activities, those losses are considered dissipation. If your spouse has a gambling addiction, dissipation could be a big part of your divorce case.

Example: In re Marriage of Morrical, 216 Ill. App. 3d 643, 576 N.E.2d 465 (3d Dist. 1991); In re Marriage of Sobo, 205 Ill. App. 3d 357, 562 N.E.2d 1083 (1st Dist. 1990).

Paying Legal Fees with Marital Assets:

Using marital funds to pay for unrelated legal expenses, like an attorney for a DUI case, is considered dissipation. However, payment of your divorce attorney is not dissipation. It is an advancement from the marital estate.

Example: Head v. Head, 158 Ill. App. 3d 597, 523 N.E.2d 17 (1st Dist. 1988); See 750 ILCS 5/508 Author’s Note 12.1). However, payments made by the parties to their respective attorneys are considered advances from the marital estate. In re Marriage of Manker, 375 Ill. App. 3d 465, 874 N.E. 2d 880, 891 (4th Dist. 2007).

Review our Guide to Attorney Fees in Illinois Divorce Cases

Rent and Home Maintenance on a Non-Marital Property:

Courts determine that a spouse dissipates marital assets when they use marital funds to pay for their own non-marital property. Expenses such as mortgage payments, repairs, and improvements fall under dissipation if they do not benefit the marriage.

Destruction of Assets:

If one spouse purposefully destroys marital property or assets, the court can consider this in a dissipation claim as the marital estate value has been decreased as a result of the spouse who was destructive.

Example: In one case, the court determined that a spouse who destroyed family photographs dissipated marital assets. Courts calculate damages for irreparable property loss and include the amount when dividing the marital estate (In re Marriage of Ferkel, 260 Ill. App. 3d 33, 632 N.E.2d 1133 (5th Dist. 1994)).

Failing to Maintain Property is Dissipation:

If one spouse fails to pay the mortgage or a loan payment, to prevent foreclosure of marital property or liens on marital property, this can be considered dissipation.

Example: Courts consider it dissipation when a spouse fails to pay mortgage payments, leading to foreclosure and a loss of equity in the marital home. In re Marriage of Jones, 187 Ill. App. 3d 206, 233, 543 N.E.2d 119, 137 (1st Dist. 1989). Some exceptions may apply, depending on the circumstances.

Failing to Pay Income Tax Liability:

Failure by one spouse to pay income taxes, which results in fees and penalties can be considered dissipation.

Example:  In re Marriage of Charles, 284 Ill. App. 3d 339, 672 N.E.2d 57 (4th Dist. 1996).

Marital Funds Spent on an Affair:

Marital funds, such as one spouse’s income or funds held in a bank account, spent on an extramarital affair, escorts, or someone other than your spouse, is dissipation. This includes money used for dinner dates, hotels, outings, sugar daddy situations, jewelry bought for the affair, and related spending.

Unusual Lavish/Extraordinary Spending:

Dissipation can take the form of one spouse suddenly going out and spending money on lavish items, such as a brand-new sports car or brand-new kitchen appliances when they are not needed. If the spending is not for paying usual and necessary living expenses, a court could find it to be dissipation. Also included in this category is when a spouse suddenly takes up day-trading stocks, despite no education or training, and loses thousands of dollars of marital funds. Courts have found that this can be considered dissipation.

Legitimate Expenses vs. Dissipation: What Doesn’t Count

Legitimate living expenses do not constitute dissipation:

Courts typically do not classify necessary expenses—such as rent or utility payments—as dissipation, even if one spouse moves out and pays for separate living arrangements during the divorce.

 Examples:

• In re Marriage of Harding(1st Dist. 1989): The court found that funds spent on “legitimate family expenses” were not dissipation. However, a spouse cannot simply claim necessary expenses without proof.
• In re Marriage of Manker(4th Dist. 2007): Rent payments are legitimate living expenses and do not constitute dissipation.
• In re Marriage of Hagshenas(2d Dist. 1992): The court held that necessary living expenses are not dissipation.”

Investments:

Investing marital funds that ultimately proves to be a loss, but is done in the normal status quo of investing money.

Example:  Bonafide investment of money, which proves to be a loss, is generally not classified as dissipation. (In re Marriage of Drummond, 156 Ill. App. 3d 572, 409 N.E. 2d 707 (4gh Dist. 1987)

Other Examples of Legitimate Expenses

Necessary Business Expenses: If one spouse uses marital funds for legitimate business costs, such as operating expenses or investments tied to a family business, the court typically does not classify this as dissipation.

Expenses During Normal Marriage Activities: Spending that occurred before the irretrievable breakdown of the marriage, even if deemed unnecessary by the other spouse, usually does not qualify as dissipation.

Pre-Breakdown Spending: Any spending that occurred before the marriage began to break down, even if deemed extravagant, does not qualify as dissipation. Dissipation claims only apply to actions taken during or after the breakdown

Mutually Agreed Upon Expenditures: Purchases or transfers made with both spouses’ consent are not considered dissipation.

Court-Sanctioned Actions: Payments or financial decisions approved by a court during the divorce process, such as temporary support or necessary expenses, do not count as dissipation.

Dissipation Claim Deadlines: Time Limits and Filing Requirements in Illinois

To file a dissipation claim in Illinois, your notice of intent must include three key details:

• The date or timeframe when the marriage began breaking down.
• A description of the property or funds that were dissipated.
• The period during which the dissipation occurred.

Illinois law also imposes strict time limits on when dissipation claims can be made:

• You cannot claim dissipation for events that occurred more than five years before the divorce petition was filed.
• You cannot claim dissipation for events that occurred more than three years after you knew (or should have known) about the dissipation.
• You cannot claim dissipation for actions that occurred before the marriage began breaking down irretrievably.

Proving Dissipation: Evidence You Need for a Successful Claim

In Illinois, the spouse accusing the other of dissipation must first provide a prima facie case showing that marital funds were misused. ‘Prima facie’ refers to evidence that is strong enough to establish a fact unless it is challenged. In many cases, this involves showing large withdrawals from bank accounts or patterns of mismanaged marital assets that have resulted in financial loss.

Once a prima facie case is established, the burden shifts to the accused spouse. They must prove through clear and convincing evidence that the funds were used for a legitimate marital purpose. This is a high standard, requiring detailed proof. Courts do not accept vague statements like, “I spent that money to buy a new couch.” Instead, receipts and other documentation must clearly trace the funds’ source and use. If the accused spouse cannot meet this burden, the court will consider the funds dissipated.

To build a prima facie case, you must gather key financial records through discovery. This includes bank statements, credit card records, and other necessary documents to identify the dissipated funds.

How Dissipation Impacts Your Property Settlement in Illinois

Once the court finds that assets were dissipated, it uses this as a factor in determining the division of marital property in equitable proportions. Courts often credit the non-dissipating spouse with 50% of the dissipated funds, as that represents their share of the marital assets.

For example, if a couple has a $200,000 marital estate that would otherwise be divided equally (50/50) and the husband dissipates $50,000, the wife is entitled to her $100,000 share. She also receives an additional $25,000 from the husband’s portion of the marital estate to account for half of the dissipated amount. The non-dissipating spouse typically recovers only half of the value of the dissipated funds.

However, finding dissipation does not require the court to offset that amount from the dissipator’s share. The court has discretion over how to handle dissipation and whether to credit the other spouse.

Fighting Back: Defending Against a Dissipation Claim

If a dissipation claim is filed against you, your first step is to gather all relevant financial records to prove how marital funds were used. Credit card statements, receipts, and bank records are essential to demonstrate that the funds served a marital purpose.

You can also argue that the spending followed the lifestyle you and your spouse maintained throughout the marriage. Courts may reject dissipation claims if the spending was not extraordinary and aligned with the status quo.

Another defense is to show that the funds in question were non-marital assets and not part of the marital estate. If proven, this typically invalidates a dissipation claim.

Finally, you may argue that the claim falls outside the statutory time limits. Illinois law bars dissipation claims for actions that occurred more than five years before the divorce filing, more than three years after the other spouse knew or should have known, or before the marriage began to break down irretrievably.

Practical Tips for Preventing or Proving Dissipation in Divorce

Preventing Dissipation: In most divorce cases, it is important to avoid dissipation by maintaining normal spending habits before and during the divorce. Avoid spending on romantic interests or gambling excessively. Do not make risky investments, spend beyond your usual budget, or make large purchases. These are not the only ways to prevent dissipation, but they are some of the easiest.

If you need to spend marital funds in ways your spouse might claim as dissipation, keep detailed records. This includes receipts, bank statements, and other documents showing that the funds were used for legitimate marital purposes.

Proving Dissipation: To build a strong dissipation claim, you must strictly follow statutory timelines. Courts will not allow claims for dissipation that occurred more than five years before the divorce was filed or more than three years after you became aware of the dissipation. It is also wise to consult a skilled divorce attorney, who can help you protect your claim by ensuring all timelines and requirements are met.

Dissipation in Illinois Divorce – Frequently Asked Questions (FAQs)

Can I claim dissipation for spending before the marriage breakdown?

No. According to the statute in Illinois, no dissipation can be claimed before the marriage began breaking down.

How far back can I go to claim dissipation?

The farthest back you can go to claim dissipation is 5 years from the date of filing of the divorce, but you cannot claim dissipation more than 3 years back from the date the spouse knew or should have known about the dissipation.

Can I recover funds my spouse spent on an affair?

If you can show that your spouse dissipated marital funds on another relationship or another woman, then the Court will likely find dissipation and you could recover half of what your spouse dissipated.

What if my spouse used marital funds for attorney fees?

Generally, this is considered an advance on the marital estate, and not dissipation, unless the attorney fees were for an attorney other than their divorce attorney.

How does dissipation affect our divorce settlement?

If a Court finds dissipation, they can award the non-dissipating spouse half of the amount of marital funds that their spouse dissipated. This means the non-dissipating spouse could get more of the marital estate than the dissipating spouse once everything is factored into the Court’s decision.

Conclusion

We’ve covered the ins and outs of dissipation claims — from what qualifies as dissipation to how courts in Illinois handle these disputes. Remember, failing to take action when dissipation is at play could mean losing your rightful share of assets.

If you’re worried about dissipation or need legal advice to strengthen your case, don’t wait. The experienced attorneys at Anderson Boback & Marshall are ready to protect your financial future. Call today to schedule a consultation.