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Gifts and Asset Transfers During Divorce in Illinois
When a couple gets married, their financial lives become intertwined. Untangling the spouses’ finances is a major aspect of the divorce process. Marital property, which is jointly owned by both spouses, must be distinguished from non-marital property, which is owned by only one spouse. Any assets and debts included in the marital estate will need to be valued and divided between the spouses. Divorcing spouses can negotiate their own property division agreement, or, if no agreement can be reached, the court will determine how to divide property.
Because assets must be divided equitably, transferring assets or giving gifts to others during divorce can be problematic. In some cases, transferring assets, even though a seemingly harmless gift, can lead to accusations of dissipation.
Dissipation of Assets
Illinois law defines dissipation of assets as the use of marital property for reasons that are unrelated to the marriage, only benefit one spouse, and during a time when the marriage is breaking down. Some classic examples of dissipation of assets include:
- Spending money during an extramarital affair
- Selling marital property to fund a drug addiction
- Destroying a spouse’s property in revenge
However, one lesser known type of dissipation of assets occurs when a divorcing spouse gives gifts of money or property to other people during the breakdown of the marriage. Giving a $20 birthday present to a family member or other small gifts are not considered dissipation. However, loaning large amounts of cash to other people or buying extravagant gifts for others may be considered dissipation.
Dissipation of assets may even involve gifts to a child. Consider the following example: A divorcing father has children from a previous marriage. One of his children from the previous marriage turns 16 years old and he buys her a car. If marital funds were used to buy the car, the marriage was undergoing a breakdown, and the gift was not approved of by his current wife, the wife could potentially have a valid dissipation claim.
Contact a St. Charles Divorce Lawyer
If you are getting divorced, it is important to understand your rights and obligations regarding the disposition of marital property. Certain asset transfers, purchases, and gifts may lead to accusations of dissipation or financial fraud during divorce.
Issues like these are just one of the reasons that it is important to work with a skilled attorney during your divorce. Contact the experienced Kane County divorce lawyers at Shaw Sanders, P.C. Call our office today at 630-584-5550 for a free consultation.
Source:
https://www.ilga.gov/legislation/ilcs/documents/075000050k503.htm
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