Marital Property Defined
Generally, marital property is all property acquired during the parties’ marriage. Marital property usually includes property that is solely titled in one spouse’s name, such as a house or vehicle. This rule also applies to each spouse’s income, and many other financial assets. Since a marriage is not only a romantic commitment but also a legal union, spouses essentially become one financial entity. This is why spouses can split up financial assets such as income during divorce.
Determining what is and is not marital property is a crucial step during the divorce process. It is necessary because property is divided under the equitable distribution standard. Equitable distribution means that each spouse receives a “fair share” of all marital property. Each spouse’s share is determined by a number of factors, including:
- Their contributions, both tangible and intangible, to the marriage;
- Each spouse’s capability to earn a future income; and
- Improper dissipation of marital property.
What Is Dissipation?
Dissipation occurs when one spouse uses marital assets for their sole benefit during a separation or divorce. Most often, a spouse dissipates funds, some of which may have come from the opposing spouse’s income. Sometimes, dissipation is explained as a way to decrease the marital estate, so there is less to divide at trial. In other words, a spouse may use marital funds for their sole advantage with the purpose of decreasing the amount of money that will go to their spouse after the divorce. Dissipation is unfair to the non-taking spouse as it can decrease, sometimes dramatically so, their portion of the marital estate once the divorce is over. It is important to note that basic living expenses, such as rent, are not usually considered dissipation.
The Effect of Dissipating Income
Even during the marriage, it is tempting to view a spouse’s income as belonging solely to him or her. After all, an employer does not hire a couple, they hire and pay an individual. However, a spouse’s income is typically considered marital property. That is, income usually legally belongs to both spouses until the divorce is final. Even the income a spouse earns while the divorce process is ongoing will likely be considered marital property. Each party should be cautious how they spend funds during divorce.
As with most issues during divorce, timing is everything when it comes to dissipation. Illinois law states that no dissipation occurred:
- “Prior to five years before the filing of the petition for dissolution of marriage; or
- Three years after the party claiming dissipation knew or should have known of the dissipation.”
If a spouse suspects the other is dissipating marital income, they make a formal claim of dissipation in court. This means that they ask a judge to determine whether dissipation occurred. If a judge finds that it did occur, the offending spouse may have to reimburse the funds.
Skilled Schaumburg Divorce Lawyers
Our experienced Schaumburg divorce attorneys understand the complex legal issues that surround marital finances. Glasgow & Olsson has helped countless clients throughout the Schaumburg area with divorces using a combination of legal experience and practical advice. Contact us today for a free initial consultation.