Dissipation of Marital Assets or Just Bad Spending Habits?

During a divorce, one of the biggest concerns is the division of marital assets. These can include anything from property and investments to personal belongings and joint bank accounts. But what happens when those marital assets seem to have disappeared? Is it a case of dissipation or simply bad spending habits? In this blog, we’ll explore the differences between the dissipation of marital assets and bad spending habits and how they can impact divorce proceedings.

Understanding Dissipation of Marital Assets

Dissipation of marital assets refers to the wasteful expenditure or mismanagement of marital property by one spouse, typically around the time of an irretrievable breakdown in the marriage. This concept is crucial in divorce proceedings as it can significantly affect the division of assets. In contrast, bad spending habits are characterized by poor financial decisions that do not necessarily deplete marital assets in a manner that undermines the marital estate.

Key Differences

• Dissipation of Marital Assets: Involves intentional actions taken by one spouse to reduce the value of the marital estate. Examples include excessive spending on affairs, gambling away substantial amounts of money, or making significant gifts to third parties without the other spouse’s consent.
• Bad Spending Habits: These are generally ongoing patterns of poor financial judgment, such as routine overspending or accumulating credit card debt, but do not specifically aim to deplete marital assets to disadvantage the other spouse in divorce proceedings.

Actions Qualifying as Dissipation

To determine whether certain actions qualify as dissipation, courts in Illinois consider:

• Timing: Did the spending occur during a period of marital breakdown?
• Intent: Was the spending intended to reduce the marital estate’s value?
• Purpose: Was the spending for marital purposes or personal benefit outside the marriage?

Common Examples

1. Extravagant Purchases or Gifting: Significant purchases or financial gifts to non-family members during a marriage breakdown.
2. Substance Abuse: Excessive spending on drugs, alcohol, or other addictions.
3. Affairs: Money spent on maintaining extramarital relationships, such as trips, gifts, or housing for a paramour.

Advice for Protecting Yourself

If you suspect your spouse is dissipating marital assets:

• Document Everything: Meticulously keep records of all financial transactions and spending.
• Consult a Lawyer: Seek legal advice to understand your rights and prepare for possible litigation.
• Act Quickly: Courts often impose time limits on dissipation claims, so timely action is crucial.

If you are accused of dissipation:

• Provide Justifications: Ensure you can explain and document the marital purpose behind significant expenditures.
• Maintain Transparency: Cooperate fully with financial disclosures to demonstrate good faith.

What To Do If You Suspect Your Spouse is Mismanaging Marital Assets

If you believe your spouse is mismanaging or dissipating marital assets, it’s essential to take action immediately. This situation can significantly impact divorce proceedings and ultimately affect the division of assets. Consult a lawyer for advice on how to best protect yourself and your financial interests during this challenging time.

Contact Us

At WARD FAMILY LAW, LLC, we guide clients through complex divorce proceedings, ensuring you receive the legal support needed to protect your assets and secure a fair outcome. Our experienced team is here to help you navigate these challenging times with confidence. Contact us today to schedule a consultation and learn more about our services.