In Illinois, when a spouse spends money for non-marital purposes, we call it dissipation. Amounts dissipated are essentially put back into the marital pot to be divided. The timing of the spending, the status of the marriage when the funds were spent, the purpose of the spending, and the amounts spent all help to determine whether certain expenses are dissipation.
My husband, shortly after I filed suit for divorce, moved out of our house and took his girlfriend on a two-week vacation to Hawaii. He charged the travel, room, food, and bought gifts for his girlfriend–putting the expenses on his credit card. He paid this off with a bonus that he received. Am I entitled to recover any of this money?
Yes. Property acquired during the marriage (except for things such as gifts or inheritance) belongs to the marriage, including the husband’s bonus. Think of it all as going into the marital pot. And the divorce court divides that marital pot between the spouses.
The legal term for one spending money on this vacation is dissipation. Illinois law defines dissipation as the use of marital property (or funds coming from marital property) for only one spouse’s own benefit (or for a purpose unrelated to the marriage) after the marriage began undergoing an irretrievable breakdown. See the Gitlin Law Firm’s article regarding the timing of dissipation as well as the three-year and five-year cut-off periods before the divorce.
What does it take to prove that there was an irretrievable breakdown of the marriage at the time my spouse dissipated the funds?
Filing for divorce obviously reflects the breakdown of the marriage. But the marriage can begin undergoing an irretrievable breakdown some time before the actual divorce filing. A spouse moving out of the marital residence because of marital discord also reflects an irretrievable breakdown of the marriage.
In one case, the trial court held that there was a breakdown when the wife stopped cooking for the husband. But the appellate court disagreed and ruled that the irretrievable breakdown did not occur until the wife filed for divorce.
In another case, the court relied on the testimony of mental health specialists who testified regarding the breakdown of the marriage.
There was also a case holding that there was no breakdown in the marriage because the parties continued to engage in sexual relations, and the breakdown did not happen until the wife petitioned for divorce.
What’s helpful is for there to be a milestone. That way, the court can conclude that from a certain date forward, the couple has passed a threshold that reflects the marriage has truly begun undergoing an irreconcilable breakdown.
The 3 and 5-Year Rule: My spouse has been losing money gambling for almost our entire 14-year marriage. Isn’t that dissipation?
Not all the way back. Illinois law provides that, “[N]o dissipation shall be deemed to have occurred prior to 3 years after the party claiming dissipation knew or should have known of the dissipation.” The phrase should have known is important.
Illinois law further provides that in no event can a dissipation claim go back more than five years before the filing of the petition for dissolution of marriage.
My husband moved out, stopped paying the mortgage, and our house was foreclosed.
I have three children, all under ten, and I’m not employed outside the home. My husband is employed. A year and a half ago, he moved out of the house and stopped making the mortgage payments, although he was able to do so. We lost the house in foreclosure proceedings. Is this dissipation?
Yes. The fact that there were irreconcilable differences in the marriage was established when the husband moved out. Since he had enough funds to pay the mortgage but did not, and the house was lost as a result, the court can find the loss of equity to be dissipation. (Equity is the difference between its fair market value and the mortgage.) Also, the claims must meet the test that they occurred within three years after you knew or should have known about them.
What are other illustrations of dissipation?
The appellate courts have found the following to be dissipation:
- Withdrawal of a substantial amount of money from a marital account and using the money to pay child support to a former wife.
- Setting up an educational trust for the children shortly before the divorce proceedings were filed.
- The mother’s taking a European vacation with the parties’ minor son against the father’s wishes.
On the other hand, no dissipation was found in these cases:
- Husband’s payment of wages to employees when the evidence did not show that the wages were too high.
- The father’s taking a vacation trip with the children since it was consistent with the marital lifestyle.
How can a person charged with the dissipation of marital funds defend himself?
Once the other side has proved that substantial expenditures were made at a time when the marriage was undergoing an irretrievable breakdown [provided the three-year and the five-year tests are met], the party charged with dissipation must establish by “clear and specific” evidence how the funds were spent. General and vague testimony that the funds were spent on marital purposes should not cut it. Practically, however, this depends on submitting a detailed notice of intent to claim dissipation that addresses the specific funds claimed to be dissipated. I discuss this issue in Section 8-22[f] “Burden of Proof for Claim of Dissipation” of my book.
What’s this that I hear about a “notice of intent to claim dissipation?” How does that work?
- A Notice of Intent to claim dissipation must generally be made not later than 60 days before trial or 30 days after discovery closes, whichever is later.
- The notice must minimally contain a date or period during which the marriage began undergoing an irretrievable breakdown, an identification of the property dissipated, and a date or the period during which the dissipation occurred.
A certificate or service of the notice of intent to claim dissipation must also be filed with the clerk of the court.
Successful notices of intent to claim dissipation will generally be more detailed. In a number of cases where dissipation depends on adding up numerous smaller expenses, the Notice will often include a spreadsheet as an Exhibit. That spreadsheet will provide a line-by-line itemization of the expenses claimed. This requires detailed discovery of credit cards and any other accounts from which there are claimed non-marital expenditures.
What would I do after receiving a Notice of Intent?
Provide a detailed response to the Notice of Intent and consider whether it makes sense to formulate your own Notice of Intent within the above time frames.
Updated: December 2024
