In Illinois divorce law, one or both spouses may claim dissipation. Dissipation is generally defined as a spouse using funds or income acquired during the marriage for that spouse’s sole benefit for purposes unrelated to the marriage while the marriage is undergoing an irretrievable breakdown. The June 15 appellate court decision in Marriage of Brown deals with many dissipation issues.
Dissipation is fact-specific to each divorce. A spouse alleging dissipation must first show marital funds were spent for non-marital purposes during the breakdown of the marriage. The burden then shifts to the spouse accused of dissipation to refute those allegations with clear, specific evidence showing how the funds were spent. Vague and general testimony is inadequate. Dissipation involves diminishing the marital estate’s value because of a spouse’s actions or inactions. Paying attorney fees out of marital assets is dissipation. Actions can constitute dissipation, even if the spouse receives no personal benefit from it, if the expenditure causes some detriment to the marital estate.
The Brown divorce involved dissipation accusations by the husband (Jeffrey) against his wife (Kerri). They included:
– Failing to apply income from a family business to business debts and accounts, which deprived the business of capital necessary to operate.
– Collecting rental income but not paying the mortgage on the rental property, causing it to be lost in foreclosure.
– Not paying homeowner’s insurance on their residence, which was damaged in a fire.
– Not paying the mortgage on the residence, also causing it to be lost in foreclosure.
Before trial Kerri was ordered to provide an accounting of the business income and expenses. No accounting appeared in the court record, and no accounting was offered into evidence at trial. Kerri testified at trial that money was spent to wind down the business. Rental income was used for living expenses such as groceries, clothes, haircuts, tuition, the children, and day care. Kerri did not pay the monthly mortgage for ten months even though she could have paid it. Some money she saved from not paying the mortgages went to pay her attorneys. She did not remember where she spent the rest of the money.
The appellate court found Kerri had exclusive control over the business, rental property, and marital home where she resided. She collected business and rental income. Kerri did not pay the insurance on the house, so insurance did not cover the fire damage. She failed to pay the mortgages on any of the properties, causing their losses in foreclosure. She paid her divorce attorneys. Kerri’s actions diminished the marital estate.
The appellate court further found Kerri’s statements about how she spent the money from the business and the rental property, and how she spent the money she should have paid on the residence mortgage, were vague and general. She did not meet her burden to show clear, specific evidence about how she spent the funds. Thus the trial court was reversed for not finding dissipation by Kerri.
Many divorces involve accusations by one or both spouses about dissipation. Brown is a good reminder to family law attorneys, as well as people having a breakdown of their marriage, about making and keeping specific records about their assets, income, debts, and expenses. Really the questionable expenses should never be made in the first place, and income must be applied to maintain assets so they are not lost.