Excessive Spending During Divorce
Once a divorce is looming, some people change their spending habits. Some start excessive spending expending money on purchases that they never did before, while others start taking trips or signing up for classes. Is any of this spending appropriate during the time you are going through your divorce?
I often run into clients who have been counseled to spend a lot more, apparently to show what that person’s needs are and to validate the request for more money. I think it is fair to say that this is an emotional time for everyone, and some people are not acting in the right way. You shouldn’t be spending any differently during a divorce then you would typically The law in Illinois-domestic relations division, wants everyone to maintain the status quo. If you always spent $400 a month getting your hair done, then it is not a problem. But if you never used to go and now you start, the court is going to look at the reasonableness of what the person is doing.
Spending in Ways Not Beneficial to Your Marriage?
If you believe that the excessive spending your spouse is doing is not beneficial to your marriage, you might have a claim for dissipation. When the court divides the marital property in your divorce case, dissipation is something that is considered by the court. What exactly is dissipation?
Is it the Dissipation of Marital Assets?
Dissipation is the spending of marital monies for the benefit of one spouse for purposes unrelated to the marriage while the marriage is undergoing an irreconcilable breakdown. The party alleging dissipation must first demonstrate that dissipation has occurred, and once that hurdle is met, the burden shifts to the other party to prove the money was used for a legitimate purpose.
Illinois law requires that you file a document, called a Notice of Intent to Claim Dissipation. That document must be filed 30 days after discovery closes and no later than 60 days before the trial. The notice has to tell the court when the breakdown in your marriage occurred. This is an important element that many people overlook. People are allowed to spend money however they like, and just because you did not like it that your spouse spent $45,000 on a race car, does not necessarily mean it is dissipation.
Is the Marriage Irretrievably Broken?
The first question you need to ask is whether your marriage has irretrievably broken down. Although you might not have been happy with the expenditure for the car, were you still a couple? Were you still going out with friends or going out to dinner together? I have had a couple of divorce trials that had to examine the sexual nature of the relationship. Are you still engaging in marital relations? Share the same bedroom? These all need to be examined if your spouse indicates that you were still a couple and there was not a breakdown. Without a break down in the marriage, an irretrievable breakdown, you cannot allege dissipation.
But let us say you can prove that your marriage underwent an irretrievable breakdown. You can prove that your spouse has been living in the basement for a year, you never go out together, you take separate vacations and you have different friends. Then you have made it through the first hurdle and an examination of the spouse’s expenses needs to be looked at.
One thing the court always asks is “how long has this been going on?” I once had a case in trial where the wife claimed that the husband’s weekly bowling was dissipation. My client testified that he had been bowling weekly for over ten years. The continuation of his bowling habit continued while they were married and after they separated. The judge did not find dissipation.
Spouse Commits a Criminal Act?
What about when a person has a spouse who commits a criminal act? The spouse is arrested and spends money on a lawyer? Loses his job? The money the spouse spent on a lawyer could be considered dissipation.
Is There an Extramarital Affiar?
What about a claim for dissipation filed by the wife when she found out her husband had had an affair and was paying child support to the other woman? Or if the wife found out that her husband had been cheating on her for the past 5 years? If the family continued to go on vacation and act like a couple, and their marriage had not broken down, then no dissipation.
I remember when golf pro Tiger Woods was going through a divorce and his wife found out about his extramarital affairs and the money spent on them. There could not be a claim for dissipation because her marriage had not broken down, but you have to wonder if it would have broken down a lot earlier if she knew. We can speculate as to the answer and it seems unfair that if your spouse hides something from you, that it cannot be dissipation. If you had known, you would likely have broken up. But that is not the way our law works — you have to be irretrievably broken in order to claim dissipation.
I have had trials where the parties had been separated for 20 years, but neither had gotten around to filing for divorce. Each side made claims of dissipation going back 10 years or more. These types of cases resulted in a change to our statute and now you have a time limit on the claim for dissipation. No dissipation shall be deemed to have occurred prior to 3 years after the party claiming dissipation knew or should have known of the dissipation, but in no event prior to 5 years before the filing of the petition for dissolution of marriage.
Watch Your Marital Finances for Excessive Spending
Marriages require some trust between the two, so it is hard when your spouse ruins the trust you placed in them. But if you do not pay attention to your finances, or what is on the credit card statements, you could be in a position where dissipation cannot be claimed by you for the excessive spending in the event of a divorce.
If you decide to go to trial on the issue, then you will need to establish which expenditures are dissipation. Is paying the mortgage from the spouse’s retirement account dissipation? Typically, you would not think so. But each case is fact-specific.
This posting is for educational purposes only to give you general information and a general understanding of the law, not to provide specific legal advice. By using this website you understand that there is no attorney-client relationship between you and the National Law Review and/or the author, and the opinions stated herein are the sole opinions of the author and do not reflect the views or opinions of the National Law Review or any of its affiliates.