Dissipation of marital assets, or dissipation of the marital estate, occurs more often than you may think and can significantly affect the outcome of a divorce. If you’re contemplating divorce or ending your marriage, you may notice your spouse misusing marital funds or damaging shared assets in ways that clearly do not benefit the marriage.
These actions, whether reckless spending, neglecting valuable assets, or deliberately causing harm, can qualify as dissipation under Illinois law. Understanding what dissipation involves, how courts define it, and the steps you can take to address it are critical to protecting your financial interests during divorce proceedings.
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What Is Dissipation of Marital Assets?
Section 750 ILCS 5/503 of the Illinois Marriage and Dissolution of Marriage Act (“IMDMA”) briefly explains dissipation as extraordinary expenses that clearly do not further common marital interests.
Examples of Dissipation
- Gambling Losses: 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: 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). Courts classify payments by the parties to their attorneys as advances from the marital estate. In re Marriage of Manker, 375 Ill. App. 3d 465, 874 N.E. 2d 880, 891 (4th Dist. 2007).
- Investments: Courts typically do not classify bonafide investments that result in losses as dissipation. (In re Marriage of Drummond, 156 Ill. App. 3d 572, 409 N.E. 2d 707 (4gh Dist. 1987)
- Rent and Home Maintenance: The First District Court found that one party’s living expenses after the marriage’s irreconcilable breakdown constituted dissipation. In re Marriage of Partyka, 158 Ill. App. 3d 545, 511 N.E.2d 676 (1st Dist. 1987) (funds spent by husband, including those to rent and maintain the residence in which he lived after leaving the marital home, were not for marital purposes and therefore constituted dissipation).
- Courts do not consider legitimate living expenses as dissipation. In re Marriage of Harding, 189 Ill. App. 3d 663, 676, 545 N.E.2d 459, 467 (1st Dist. 1989) (while sanctioning funds spent on “legitimate family expenses, and necessary and appropriate purposes,” found that a bare assertion that funds withdrawn from living trust account were used to pay for necessary expenses was insufficient to avoid a finding of dissipation) In re Marriage of Manker, 375 Ill. App. 3d 465, 476, 874 N.E.2d 880, 889-90 (4gh Dist. 2007) (rent is a legitimate living expense). Living expenses were held not to constitute dissipation in In re Marriage of Hagshenas, 234 Ill. App. 3d 178, 197, 600 N.E.2d 437, 451 (2d Dist. 1992).
- Destruction of Assets: Courts classifies the destruction of family photographs as dissipation. If the marital property could not be restored, the trial court should have determined damages; if the marital property could not be restored, the trial court should have determined damages and considered an issue in the distribution of marital property. (In re Marriage of Ferkel, 260 Ill. App. 3d 33, 632 N.E.2d 1133 (5th Dist. 1994)
- Failing to maintain property is dissipation: Courts consider a failure to pay mortgage payments and prevent foreclosure in a family home as dissipation when it leads to a loss of equity. In re Marriage of Jones, 187 Ill. App. 3d 206, 233, 543 N.E.2d 119, 137 (1st Dist. 1989). Exceptions apply.
- Failing to pay income tax liability: Courts classify failing to pay income tax liability, which results in interest and penalties, as dissipation. In re Marriage of Charles, 284 Ill. App. 3d 339, 672 N.E.2d 57 (4th Dist. 1996).
What Is NOT Considered Dissipation of the Marital Estate in a Divorce Case?
Dissipation refers to the misuse or waste of marital assets for purposes unrelated to the marriage during an irretrievable breakdown. However, not every use of marital funds qualifies as dissipation. Actions that are generally not considered dissipation include:
- Reasonable Living Expenses: Spending on day-to-day necessities, such as groceries, rent, or utility bills, is not dissipation as long as these expenditures are typical for the household.
- 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.
Why Legal Guidance is Important
If you’re concerned about dissipation in your divorce, taking proactive steps can make a difference in protecting your financial interests. An experienced attorney can help you identify dissipation, gather the necessary evidence, and present a strong case to ensure a fair outcome.
At Anderson Boback & Marshall, our divorce attorneys understand how complex these situations can be. Whether you need guidance on dissipation or any other family law matter, we’re here to provide clear advice and effective representation. Contact us to discuss your case and learn how we can help.
