What Is Dissipation of Assets, and How Can it Affect the Divorce Process?
No one goes into a divorce expecting it to be easy, but most people do not realize just how complex and challenging the financial aspects can be. There are a number of financial issues that a couple will need to address during divorce, from dividing their assets and debts to figuring out whether one spouse will pay child support or spousal support to the other. If these issues are not handled correctly, a couple may encounter contentious legal battles that may drag the divorce process out for multiple months or even years, resulting in additional expenses and financial complications.
As a couple works to divide their marital assets, they will need to be sure they fully understand the extent of property they own, the value of different assets, and the steps they can take to ensure they will each have the financial resources they need going forward. This process requires spouses to be completely open and honest with each other about all financial issues. Unfortunately, there are many cases where spouses may conceal information from each other and attempt to unfairly influence the property division process. Matters may become even more complicated in situations where one spouse has acted in a way that has caused financial harm to the other. In cases involving the dissipation of assets, a spouse will need to work with an experienced Chicago divorce attorney to determine how to address this issue.
Understanding Asset Dissipation
All of the money, property, and other assets owned by a married couple are known as the marital estate. A couple will be required to divide the property they own together in a fair and equitable manner. However, there may be some situations where the actions of one spouse may have led to a reduction in the value of the marital estate. In some cases, these actions are considered to be asset dissipation, and if a spouse engaged in this type of behavior, the other spouse may need to bring these matters to the attention of the court to ensure that the marital estate can be divided correctly.
Asset dissipation can take multiple forms, including:
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Spending marital funds for non-marital purposes - One spouse may use money from a joint bank account to purchase items for themselves or someone other than their spouse. This type of dissipation may occur when a spouse is engaging in an extramarital affair, and they may buy gifts for their paramour, spend money on trips or hotel rooms, or otherwise use money that should have gone toward paying bills or supporting their family.
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Wasting marital assets - A spouse may have recklessly spent money or used property in a way that has reduced the value of the marital estate. For example, a person who engages in drug or alcohol abuse may spend marital funds in pursuit of their addiction. Losing money through gambling is another common form of asset dissipation. Large, lavish purchases that were made solely for a person's own benefit or charges to a joint credit card for personal purchases or activities may also need to be addressed during the divorce process.
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Destroying property - In some cases, a person may intentionally destroy items that they know are important to their spouse, or they may act in ways that are meant to cause financial harm. In these cases, the spouse who has suffered harm may seek compensation from the other party.
How Is Asset Dissipation Addressed During a Divorce?
During the process of dividing marital property, a spouse may make an asset dissipation claim. If they can show that the other spouse committed actions that reduced the value of the marital estate, then property may be divided in a way that addresses this issue. That is, the spouse who dissipated assets may be required to reimburse the marital estate for the amount that was lost or wasted, or the other spouse may receive a larger share of marital assets.
In Illinois, there are some specific requirements that must be met for a spouse's actions to be considered dissipation of marital assets. Illinois courts have ruled that asset dissipation can only occur after a couple's marriage has begun to break down irretrievably. That is, if a spouse made large purchases for themselves while the couple was still happily married, this would not be considered asset dissipation. However, if the couple had begun to experience relationship issues, and one spouse started a relationship with a new partner and spent marital funds on this new relationship, this will be more likely to be considered a misuse of marital assets.
Illinois law also states that a person can only make an asset dissipation claim within three years after they knew or should have known about the dissipation, and they cannot make a claim related to dissipation that occurred more than five years before the couple's divorce began. So, if a person discovered that their spouse had an affair 10 years ago, they cannot address any use of marital assets that took place at that time, and they will be limited to addressing dissipation that occurred in the more recent past.
Contact a Cook County Marital Asset Dissipation Lawyer
Asset dissipation can be a very complex issue, and it is important to have an experienced divorce lawyer on your side if you believe that your spouse has wasted or misused marital assets. With the help of a Chicago property division attorney, you can seek a fair division of your marital property, ensure that all financial issues will be addressed properly, and prepare for ongoing success once your divorce is complete.
Sources:
https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm
https://public.fastcase.com/ppbqSQpNDaJE%2F8PlIk0b8Nsk8Y3wJm7haqmAUALYjgU%3D
