Dissipation of Marital Property

Dissipation of marital property occurs when one spouse, for his or her sole benefit or for a purpose unrelated to the marriage, uses money or assets of the marital estate when the marriage is undergoing an irreconcilable breakdown. In re Marriage of Miller, 796 N.E.2d 135 141 (Ill. App. 5th Dist. 2003).

As stated in the statute, "marital property" is all property acquired during the marriage bye either spouse, including debts and other obligations, except what is considered "non-marital property." 750 Ill. Comp. Stat. Ann. 5/503. Non-marital property includes property acquired by gift or by inheritance, any income derived from or increase in value of such non-marital property, property acquired by a spouse after a judgment of legal separation, and property excluded from the marital estate by valid agreement, such as prenuptial or postnuptial agreement. 750 ILCS 5/503(a).

Dissipation happens only when the marriage is undergoing an irretrievable breakdown. The court does not give an exact event that begins the process of an irretrievable breakdown of a marriage. The Appellate Court in In re Marriage of Holthaus says an irreconcilable breakdown occurs when "the parties stop having marital relations, sleeping in the same bedroom, living in the same part of the house, sharing meal and communicating." 899 N.E.2d 355,363 (Ill.App.2nd Dist. 2008). The courts have also stated that an irreconcilable breakdown occurs when the relationship is in "serious jeopardy." In re Marriage of Drummond, 509 N.E.2d 707, 715 (Ill.App.4th Dist. 1987). While it is difficult to pinpoint an exact date when the marriage began undergoing an irreconcilable breakdown, the court will look to the time where it was apparent that a breakdown of the marriage was inevitable.

An additional concern of timing of dissipation takes place when it comes to a party claiming dissipation of property. Pursuant to 750 ILCS 5/503(d), to claim dissipation, a party must conform to four conditions. First, the party must file a notice of intent to claim dissipation no later than 60 days before trial or 30 days after discovery closes, whichever is later. Second, the notice of intent to claim dissipation must contain a date or a period of time during which the marriage began undergoing an irretrievable breakdown, an identification of the property dissipated, and a date or period of time which the dissipation occurred. Next, a certificate of service of the intent to claim dissipation must be filed with the clerk of the court and be served pursuant to applicable rules. Finally, the party must identify the time period which the dissipation occurred. Dissipation claims are limited to 5 years before the filing of the petition for dissolution of marriage or 3 years after the time the party claiming dissipation knew or should have known of the dissipation. This means if the spouse against whom the dissipation claim is filed against was unaware of the dissipation, the dissipation claim may reach back 5 years prior to the filing of the petition. However, if the spouse against whom the dissipation claim is filed against did know, or reasonably should have known, of the dissipation, the claim will not be deemed to have occurred prior to three years.

Once a party has sufficiently established an expenditure of marital funds when the marriage began undergoing, or is currently undergoing, an irreconcilable breakdown, the burden to prove the dissipation did not occur shifts to the party being charged with dissipation. In re Marriage of Partyka, 158 Ill.App.3d 676, 680 (1d Dist. 1987). The party must show through clear and convincing evidence how the marital funds were spent. Partyka, 158 Ill.App.1d at 680. The court will not accept vague or general statements, such as; the funds were spent on marital expenses or bills. Id. Such expenses the court has found to be dissipation include, intentional failure to make mortgage payments on marital residence, intentionally or carelessly causing a family business to be less profitable, intentional destruction of photographs, and expenditures of martial funds by husband on vacations taken with another women.

Once there is a finding of dissipation and the party who is being charged with the claim of dissipation provides clear and convincing evidence of how the funds were spent, the court can decide whether to award dissipation and the amount awarded to the spouse. A trial court is not required to award the other spouse cash or property equal to half of the amount dissipated. The trial court may order an award greater than one-half of the amounts dissipated, less than one-half of the amounts, or the court may order no reimbursement by the dissipating party at all, the court has the discretion in the decision.