What Is Dissipation of Assets?

Dissipation of assets occurs when one spouse intentionally wastes, destroys, or squanders marital property for purposes unrelated to the marriage, typically during the period when the marriage is breaking down or divorce proceedings are underway. Courts treat dissipation as a form of economic misconduct that reduces the marital estate available for division, and the spouse responsible may be required to reimburse the estate or accept a smaller share of the remaining assets.

How Do Courts Define Dissipation?

Courts across the United States use similar but not identical definitions of dissipation. The essential elements that most jurisdictions require are:

• Marital funds were used — the spending must involve marital property, not separate property
• The marriage was undergoing an irreconcilable breakdown — most courts look at spending after a specific triggering event (filing for divorce, separation, or the point when the marriage was effectively over)
• The spending was for a non-marital purpose — the expenditure did not benefit the marriage or family
• The spending was intentional — negligent financial management generally does not qualify as dissipation, though the line can be blurry

The Illinois Marriage and Dissolution of Marriage Act (750 ILCS 5/503(d)(2)) provides one of the most cited statutory frameworks, defining dissipation as the use of marital property for the sole benefit of one spouse for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.

Common Examples of Dissipation

Dissipation claims arise from a wide range of spending behaviors. Some are obvious; others require forensic analysis to identify.

Category	Examples	Typical Amounts
Extramarital affairs	Hotels, gifts, travel, dinners, apartment rent for a paramour	$5,000 - $200,000+
Gambling	Casino losses, online gambling, sports betting	$10,000 - $500,000+
Substance abuse	Drugs, alcohol, related legal fees and rehabilitation	$5,000 - $100,000+
Luxury purchases	High-end electronics, jewelry, vehicles, clothing for personal use	$10,000 - $250,000+
Gifts to third parties	Large gifts to new romantic partners, friends, or family members	$5,000 - $100,000+
Business manipulation	Paying inflated salaries to relatives, creating unnecessary expenses	$20,000 - $500,000+
Deliberate destruction	Damaging marital property, crashing a vehicle, destroying valuables	Varies widely
Excessive litigation spending	Using marital funds to pay for unreasonable legal tactics	$10,000 - $200,000+

In the Illinois case In re Marriage of O’Neill (2006), the court found dissipation of over $180,000 where the husband spent marital funds on gambling, entertainment, and a girlfriend during the two years preceding the divorce filing.

How Does the Burden of Proof Work?

Dissipation claims follow a specific burden-shifting framework in most jurisdictions:

1. The accusing spouse must first make a prima facie showing of dissipation by identifying specific expenditures, the approximate amounts, and the time period involved
2. The burden then shifts to the spending spouse, who must prove by clear and convincing evidence that each expenditure was a legitimate marital expense
3. If the spending spouse cannot account for the expenditures, the court may presume dissipation and credit the other spouse with the dissipated amount in the property division

This burden-shifting approach is critical because the spending spouse typically has the best access to information about how and why the money was spent. Courts do not require the accusing spouse to prove a specific improper purpose — only to raise a reasonable question about the spending.

Documentation is essential for both sides. The accusing spouse should gather bank statements, credit card records, and other financial evidence showing the suspicious expenditures. The defending spouse should be prepared to explain every significant expenditure with receipts, invoices, or other corroborating evidence.

What Time Frame Do Courts Examine?

The relevant time period for dissipation claims varies by jurisdiction and by the specific facts of each case.

• Illinois — examines spending from the point when the marriage began to undergo an irreconcilable breakdown (often 1 to 3 years before filing)
• New York — typically looks at spending from the date of separation or the date of the divorce action
• California — examines spending from the date of separation under Family Code Section 1101
• Florida — courts have discretion but commonly examine the 2-year period before filing

Some courts apply a lookback period of 3 to 5 years when there is evidence of a pattern of misconduct that began well before the formal breakdown of the marriage. The trend among courts is to examine a broader time frame when the evidence supports it.

As a practical matter, most successful dissipation claims focus on spending that occurred within 1 to 3 years of the divorce filing. Claims reaching back further require stronger evidence of both intent and marital breakdown.

How Do Courts Handle Proven Dissipation?

When a court finds that dissipation occurred, the remedy is usually a financial adjustment in the property division.

• Credit to the innocent spouse — the most common remedy; the dissipated amount is added back to the marital estate on paper, and the innocent spouse receives their share of that amount from the remaining assets
• Unequal division — the court awards a larger percentage of remaining assets to the innocent spouse to compensate for the waste
• Alimony adjustment — in some jurisdictions, dissipation is a factor in alimony calculations, potentially increasing the amount or duration of support
• Attorney fee awards — courts may order the dissipating spouse to pay the other party’s legal and forensic accounting fees incurred in proving the claim

For example, if a court determines that $100,000 in marital assets was dissipated and the jurisdiction follows a 50/50 division principle, the innocent spouse would receive a $50,000 credit from the remaining marital estate.

Frequently Asked Questions

Does spending money on a lawyer count as dissipation?

Generally, reasonable attorney fees incurred in good faith do not constitute dissipation, even when paid from marital funds. However, courts have found dissipation when one spouse uses marital funds to pursue frivolous litigation, engage in scorched-earth legal tactics, or pay for excessive legal fees disproportionate to the issues in the case. The key distinction is whether the legal spending was reasonable and necessary under the circumstances.

Can dissipation include spending before we separated?

Yes. Most courts recognize that a marriage can be undergoing an irreconcilable breakdown well before the formal date of separation. If one spouse was spending $3,000 per month on gambling for two years before the couple physically separated, that spending may qualify as dissipation if the marriage was effectively deteriorating during that period. Courts look at the totality of circumstances, including marital counseling attempts, discussions about divorce, and the overall trajectory of the relationship.

What if both spouses contributed to dissipation?

Courts can and do find mutual dissipation. When both spouses have wasted marital assets, courts typically calculate each spouse’s dissipation separately and offset the amounts against each other. If one spouse dissipated $80,000 and the other dissipated $30,000, the net dissipation of $50,000 would be credited to the spouse with the smaller dissipation amount. Courts retain broad discretion in how they handle these situations.

How Untie Supports Dissipation Claims

Building a dissipation case requires tracing every dollar of suspicious spending across bank accounts, credit cards, and other financial records — often spanning several years. Untie’s financial analysis technology helps identify patterns of unusual spending, flag transactions that fall outside normal marital expenditures, and organize the evidence needed to present a compelling dissipation claim to the court. By automating the most time-intensive aspects of financial analysis, Untie makes it practical to investigate dissipation claims that might otherwise go unexamined due to the cost and complexity of manual review.