Why Hiding or Carelessly Spending Money During Divorce is a Bad Idea

 Posted on June 04, 2021 in Family Law

You’re about to separate from your spouse – you might even have gone through the preliminary steps – and it’s natural to want to look out for your own interests, especially if you anticipate the divorce getting hostile. But spending, hiding, or not declaring money, assets, and even smaller items like jewelry, precious metals, and bonds, can backfire and make a divorce longer and more hostile. Even reckless spending of money on gambling, fancy toys, or a new partner can be a huge mistake and may even count as dissipation.

What is Dissipation?

According to the Illinois Supreme Court, dissipation of assets is defined as using or spending assets in a way that only benefits one spouse and is unrelated to the marriage. The spending must take place while the marriage is “undergoing an irretrievable breakdown.” 

Everyday legitimate expenses like mortgage payments, groceries, and utility bills will not be considered dissipative spending. But careless or wasteful spending on things that are unnecessary or which only benefit one spouse have been considered dissipative. In Illinois, past cases have included: 

• Spending marital money or giving marital money to a new partner outside of the marriage

• Taking a new partner on dates, vacations, and giving gifts paid for with marital funds

• Gambling, especially in significant amounts

• Causing a family business to lose money through careless or intentional behavior

• Destroying property or other assets

• Giving family members large sums of marital money in order to hide it 

When Does Dissipation Apply?

In order for a judge to rule spending as dissipation, the marriage has to be considered to be undergoing an “irretrievable breakdown.” This means spouses are no longer going out in public together as a couple, attending family events as a couple, or sharing marital intimacy. It can be difficult to establish whether an “irretrievable breakdown” has begun, and courts may ask some very personal questions and want to know about any efforts at reconciliation. Generally, however, if a couple has clearly ceased behaving as a couple, and one person has carelessly wasted money or other assets, dissipation will apply. 

What Happens When Dissipation is Judged to Have Occurred?

The spouse who spent the money will typically have the amount removed from their portion of the divorce settlement, and the innocent spouse will be rewarded a larger share of the marital assets. If ongoing dissipation is occurring, a judge may order that assets or accounts are frozen and open lines of credit may be shut down. 

Contact a DuPage County Divorce Lawyer Today

Divorce can be especially contentious and unpleasant when one person is being dishonest or thoughtless about the couple’s shared assets. If you know or suspect your spouse has been engaging in dissipation, you should find out what your options are. Contact a Hinsdale, Illinois family law attorney from Martoccio & Martoccio Family Law for help. Call 630-920-8855 for a confidential consultation with one of our experienced lawyers. 

Sources:

https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm 

https://public.fastcase.com/ppbqSQpNDaJE%2F8PlIk0b8Nsk8Y3wJm7haqmAUALYjgU%3D