When you are going through a divorce, it can feel like your life comes to a standstill while you work out the detail with your former spouse. This process is particularly frustrating when it comes to dealing with your finances. How will finances be shared while the divorce is still in process? What are you allowed to spend money on, and what should you avoid? Can you take out a new credit card while going through a divorce?
Keep reading for some helpful tips on handling your finances while going through a divorce.
Avoiding Dissipation of Marital Assets Allegations
No matter who initiated the divorce, you must be very careful about how you spend money when you are separating from your spouse. The last thing you want is to be accused of dissipating marital assets. Marital asset dissipation is when one spouse intentionally depletes or uses marital assets for their own benefit while the marriage is going through an irretrievable breakdown.
For example, if one spouse attempts to drain a shared savings account so that their spouse will not get the funds during property division, they may be charged with dissipation. Similarly, if one spouse spends marital assets on an extramarital romantic partner or makes frivolous purchases for themselves, they may also be accused of dissipation. You also have to be careful with how you pay individual debts. Using shared assets to pay off a debt classified as non-marital may also be considered dissipation.
Dissipation is a serious offense and can result in the person being found guilty being required to pay back the assets or may receive fewer marital assets in the divorce settlement. Because dissipation is taken so seriously by the courts, you want to do everything in your power to avoid these allegations. If you are accused of dissipation, you should reach out to our attorneys right away for guidance.
How Does Illinois Define Marital Assets
According to the Illinois Compiled Statutes Section 503, marital property is all property, debts, and other obligations that were acquired during the marriage. It is also important to remember that, according to the previously cited statute, any property acquired prior to the judgment of dissolution of marriage is presumed marital property. This means that anything acquired after you file for divorce but before you receive your final judgment will also be considered marital property.
Property, debts, and obligations acquired before the marriage, even if obtained with the marriage in mind, are considered non-marital property. This property remains separate unless otherwise stated in a prenuptial agreement or transferred into co-ownership with your spouse.
Non-marital property may include:
- Gifts, legacies, or inheritances
- Property acquired in exchange for property acquired before the marriage
- Property acquired after a judgment of legal separation
- Property excluded in a legally valid prenuptial or postnuptial agreement
- Property acquired before marriage, excluding property that may have both marital and non-marital properties, such as retirement accounts and pensions
Additionally, any increase in value of non-marital property or income derived from non-marital property will also be considered separate and not subject to property division.
Determining what marital and non-marital property is is a complicated process. It is important that you work with a lawyer during the divorce process to ensure that your interests are protected and that all property is classed appropriately and correctly.
Can I Make Large Purchases when Going Through a Divorce?
Because you want to avoid an allegation of dissipation of marital assets, you should put off large purchases until your divorce is finalized. Alternatively, if making a large purchase is unavoidable, such as a new car, you must be careful not to use shared assets to make the purchase. For example, if you have assets classified as individual or separate (non-marital property) from your shared marital assets, you may use those to make your purchase.
Generally speaking, you want to spend conservatively and carefully while going through a divorce. Do your best to avoid spending marital assets unless it is for things that are for the family, such as your mortgage payment or expenses related to your shared children. If you are unsure about making a purchase while going through a divorce, you should consult with your attorney.
What to Do If You Suspect Your Spouse of Dissipating Marital Assets
If you are concerned that your spouse has dissipated marital assets, you should get in touch with our Chicago divorce attorney right away. You should also collect all financial records you have access to and any proof of dissipation. If you are unsure if something is relevant, keep a record of it, and consult your lawyer. A skilled lawyer experienced in handling dissipation cases, like ours at Merel Family Law, can provide you with the guidance you need and help you file a claim with the courts.
