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Dissipation Clams in Illinois Divorce Cases

February 11, 2014

            In determining how to divide property in Illinois divorce cases, judges are directed by 750 ILCS 5/503(d), which sets forth a number of factors that affect how marital property may be distributed.  The second of these factors that the Court may consider is the dissipation of marital assets by either party.  “Dissipation” has been defined by Illinois appellate courts as the use of marital property for the sole benefit of one of the spouses for a purpose unrelated to the marriage at a time that the marriage is undergoing an irreconcilable breakdown.  One common form of dissipation is spending marital assets on a new girlfriend or boyfriend while still married.

 

            In the past, dissipation claims in Illinois were often used as a form of leverage to gain a more favorable settlement agreement.  As a divorce case came to trial many divorce attorneys would present various claims of dissipation as a method of increasing their claims to the marital estate.  This form of litigation had the effect of creating an enormous amount of work for each side in the days and weeks before the trial.  Often times the dollar amount of the claimed dissipation would be dwarfed by the legal fees required to defend against the claim.

 

            Fortunately the Illinois legislature recently amended the statute governing property distribution (750 ILCS 5/503) with respect to the making of dissipation claims.  There are now specific requirements and deadlines that must be met in order to make a dissipation claim.  Section 503(d)(2) of the Illinois Marriage and Dissolution of Marriage Act now provides as follows:

 

 (2) the dissipation by each party of the marital or non-marital property, provided that a party's claim of dissipation is subject to the following conditions:

 

(i) a notice of intent to claim dissipation shall be given no later than 60 days before trial or 30 days after discovery closes, whichever is later;

 

(ii) the notice of intent to claim dissipation shall contain, at a minimum, a date or 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 during which the dissipation occurred;

 

(iii) the notice of intent to claim dissipation shall be filed with the clerk of the court and be served pursuant to applicable rules;

 

(iv) no dissipation shall be deemed to have occurred prior to 5 years before the filing of the petition for dissolution of marriage, or 3 years after the party claiming dissipation knew or should have known of the dissipation;

 

            Since the amendment of the statute, Illinois attorneys and parties planning to make a dissipation claim must now have a deadline by which they must serve a notice of intent to claim dissipation as opposed to waiting until the day of trial.  The notice must also give a description of the property dissipated, when the marriage broke down, when the property was dissipated and it must be filed with the Court.  Finally, no party may make a claim of dissipation that occurred more than five years before the divorce filing or three years after the dissipation.

 

            The new statute will hopefully end the “trial by ambush” method of making dissipation claims while still allowing for legitimate dissipation claims to be brought before the trial courts.   There are in fact many legitimate dissipation claims that should be brought before the court.  It is, therefore, critical that your Illinois divorce attorney be aware of the amended statute and the technical methods by which a dissipation claim must be made.

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