What is dissipation and why should you be aware of it in a divorce proceeding?
Keeping track of your finances is a key aspect during your divorce proceeding. Your attorney will ask for all of your credit card and bank statements from a specific period of time during the discovery phase of your divorce proceeding. Collecting and organizing your financial records is important in order to see how you and your spouse spend your money.
What is Dissipation?
Another reason to collect your financial records is to see if your spouse has dissipated your marital assets.
- According to the Illinois Marriage and Dissolution of Marriage Act, dissipation of marital assets occurs when one spouse uses money or assets for purposes unrelated to the marriage after the marriage has “irretrievably or irreconcilably broken” but before the divorce has been finalized.
- The dictionary definition of dissipation is waste by misuse, to spend or use wastefully or extravagantly, to squander, to deplete.
In other words, if your spouse spends marital money frivolously on items not related to the marriage while the marriage is breaking down, you, the other spouse may make a claim for dissipation in a divorce through your attorney.
How to Prove Dissipation
Dissipation usually arises when one spouse spends marital money on an extramarital affair, extravagant travel and vacations, gifts or anything else that does not benefit your marriage. Often, a spouse does not learn of the other spouse’s dissipation until the discovery phase of the divorce, which is when your attorney asks for your financial records, among other documents.
Your attorney will flag or mark any suspicious spending by your spouse and ask your spouse for an explanation of said spending.
Dissipation in Your Divorce Case
During the process of your divorce case, 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. However, if you, a spouse, believes that your spouse has in fact dissipated your combined marital estate, then you, through your attorney, must file a Notice of Intent to Claim Dissipation with the court.
The Notice of Intent must include:
- The date or period of time during which the marriage began undergoing an irretrievable breakdown
- An identification of the property dissipated, and
- A date or period of time during which the dissipation occurred.
Therefore, the client must know what they are claiming dissipation of and when it occurred before making the claim.
It is important to note, destruction of property and failed investments/gambling can also be dissipation. The offending spouse does not need to directly benefit from the use of the assets, they only need to have used them in a way that was unrelated to the marriage.
On the contrary, any spending that had been previously approved during the marriage cannot be considered dissipation, as maintaining the lifestyle established during the marriage does not support a claim of dissipation.
What Happens if a Dissipation Claim Succeeds?
If a dissipation claim succeeds, the judge may reduce the offending spouses' share of marital assets to reimburse the marital estate (and therefore the other spouse) for the lost assets.
It is important to inform your attorney if you believe your spouse has used your marital funds or estate on anything besides your marriage so your attorney can look out for any skeptical spending by your spouse during the discovery phases of your divorce proceeding.