Asset dissipation occurs when one spouse intentionally wastes marital assets in anticipation of a divorce. This can take various forms, such as extravagant spending, transferring marital assets to third parties without mutual consent, destroying marital property or other actions intended to reduce the value of the marital estate to the detriment of the other spouse.
With fewer assets to divide between you and your spouse due to asset dissipation, you could be left with less than your fair share of the marital estate when the divorce is settled. Fortunately, you don’t have to sit back and watch as your spouse burns through assets you are entitled to.
The signs to look out for
Identifying asset dissipation is crucial to mitigating your losses and protecting your financial interests. Some red flags that may indicate financial misconduct by your spouse include:
- Unexplained withdrawals
- Sudden changes in spending habits
- Hidden or undisclosed accounts
- Spontaneous transfer or sale of assets
- Gambling or risky investments
- Unusual business transactions
Should you notice any of these signs, document all the suspicious transactions and gather relevant evidence demonstrating your spouse’s financial actions or motives were in bad faith, only meant to benefit them. Consider hiring a forensic accountant if necessary, as the burden of proof lies on you to prove your claims of asset dissipation.
How it may affect your divorce settlement
Illinois law strives for an equitable division of marital assets to achieve fairness rather than equality. As such, the court may adjust asset division in your favor to balance the financial impact of your spouse’s actions if it’s proven they dissipated marital assets.
Navigating a divorce is challenging enough without the added burden of asset dissipation. With legal guidance, you can better address such unforeseen challenges and protect your interests.
