What is the Dissipation of Marital Assets?

When a marriage starts to break down, the division of marital property is one of the most significant aspects of a divorce. This process can become even more complex if one spouse is accused of dissipating marital assets. But what exactly does “dissipation” mean? And why does it matter during divorce proceedings? At Hammer Serna & Quinn, LLC, we understand the complexities of property division and can help guide you through this challenging time.

Understanding Dissipation of Marital Assets

Dissipation of marital assets occurs when one spouse uses marital property for their sole benefit, for purposes unrelated to the marriage, while the relationship is undergoing an irretrievable breakdown. This could involve reckless spending or wrongful transfers of shared financial resources at a time when both parties are expected to preserve the marital estate in anticipation of division.  

For instance, if one spouse spends large sums of money on an extramarital relationship, gambles irresponsibly, or transfers assets to friends or family to avoid splitting them, these actions could be labeled as dissipation. The key factor is that such expenditures or transfers must be unrelated to the marriage and typically occur during its decline.

Why Dissipation Matters in Divorce

Dissipation directly impacts the court’s ability to fairly divide marital property. Illinois law, for instance, emphasizes equitable division—this does not always mean a 50/50 split but rather a fair allocation based on the circumstances. When one spouse wastes marital assets, the remaining pool of property available for division decreases, creating an imbalance. Courts take dissipation claims seriously as they aim to ensure fairness for the unaffected spouse.  

Examples of Dissipation

The ways in which dissipation can occur are varied and often contentious. Common examples include:

• Extravagant Spending: Lavish vacations or luxury purchases benefitting only one spouse.
• Concealing or Hiding Assets: Selling marital property at below-market value or transferring assets to friends or family.
• Funding Extramarital Activities: Spending significant marital funds on a new partner.
• Business Misconduct: Using marital funds for poorly conceived or self-serving business ventures.

Each instance will be closely evaluated by courts, with context playing an essential role in determining whether dissipation took place.

Legal Consequences of Asset Dissipation

If dissipation is proven, courts may adjust the property settlement to compensate for the lost assets. For example, the non-wasting spouse may receive a larger share of the remaining property or additional financial compensation. It’s important to note that this process requires clear evidence of dissipation. Courts will often scrutinize the timing and purpose of the spending to distinguish between dissipation and “ordinary” but contested use of marital funds.

What to Do If You Suspect Dissipation

If you believe your spouse has been dissipating marital assets, taking action quickly is vital. Here are practical steps to protect yourself:

1. Gather Evidence: Collect financial statements, records of unusual transactions, or evidence of wasteful spending. Documentation is critical to support a dissipation claim.
2. Monitor Accounts: Keep an eye on shared accounts for any sudden withdrawals or transfers.
3. Seek Legal Counsel: An experienced divorce attorney can help evaluate your situation, build a dissipation case, and ensure your financial interests are protected during divorce negotiations.  

Schedule a Consultation

At Hammer Serna & Quinn, LLC, we guide clients through every step of the divorce process with compassion and precision. If dissipation is a concern in your case, contact us today for a consultation. We are here to protect your rights and help secure the outcome you deserve.