When you know you are getting divorced, you don’t need to wait for a court to order a division of assets to start dividing items. Couples usually each claim the car they were driving, their clothes and even pets well before the divorce decree is entered.
For whatever reason, dividing a bank account in advance of a divorce feels more “official” and generates more questions. Can either party to an Illinois divorce take their half of a bank account right away? Can either party to an Illinois divorce empty the marital bank accounts as a preventative measure?
When Can You Withdraw Money From A Bank Account In An Illinois Divorce?
It would make sense for a law that required the parties to an Illinois divorce to leave their financial situation frozen until a court can determine who owns what.
In fact, there was a law in Illinois, 750 ILCS 5/501.1, that forced the parties to refrain from draining bank accounts during a divorce until further order of court. Then that law was deemed an illegal taking by the Illinois Supreme Court, Messenger v. Edgar, 623 N.E.2d 310 (Ill. 1993), because it wouldn’t let people spend their money without permission and, thus, was a violation of the right to due process.
So, now, in Illinois it is the opposite. In Illinois, there is no law that prevents anyone in Illinois from completely emptying the marital bank accounts…until further order of court.
If someone does take an unreasonable amount of money from of a bank account or even threatens to, the other party has a series of options: 1) A temporary injunction preventing them further withdrawals, 2) A division of the taken assets (wherever they are), and/or 3) a claim for dissipation of assets.
While the law allows for a divorcing party to drain a bank account, it is important to understand the various solutions to such obvious and imprudent behavior.
Temporary Injunctions To Prevent A Spouse From Emptying Or Even Accessing A Bank Account In An Illinois Divorce
When one party to an Illinois divorce threatens to take money out of an account that seems unreasonably large or for a nefarious purpose, the other party can ask that the court forbid any bank account withdrawals that aren’t “in the usual course of business”
“Either party may petition or move for…a temporary restraining order or preliminary injunction, accompanied by affidavit showing a factual basis for any of the following relief…restraining any person from transferring, encumbering, concealing or otherwise disposing of a any property except in the usual course of business or for the necessities of life” 750 ILCS 5/501(a)(2)(i)
Whenever a court tells someone they cannot do something, it is called an “injunction” whereby the culpable party is “enjoined” from doing the possible behavior.
To grant this preliminary injunctive relief, the trial court must find that “(1) the plaintiff possesses a certain and clearly ascertainable right that needs protection; (2) the plaintiff will suffer irreparable harm without the protection of the injunction; (3) there is no adequate remedy at law; and (4) there is a substantial likelihood that the plaintiff will succeed on the merits of the case.” In re Marriage of Schmitt, 321 Ill. App. 3d 360, 371 (2001)
When a party is being prevented from withdrawing or spending money, it will be difficult to prove that “the plaintiff will suffer irreparable harm without the protection of the injunction.” After all, money is fungible. Missing money can just be replaced by other money.
Still, there may be reasons to enjoin a party from draining a bank account. The other party could be sure to spend the money without any possibility of re-earning the money. Or, the other party could possibly abscond to a country beyond an Illinois divorce court’s jurisdiction.
Draining a bank account has terrible optics. So, give the judge a reason to keep it from happening.
What If My Ex Already Emptied Our Bank Account Before Or During Our Illinois Divorce?
Not to worry. The money may not be in your bank account anymore…but the money is somewhere…and your spouse has to tell you where that money is (if you ask).
You can ask where the money is in a variety of ways. You can issue a financial affidavit, interrogatories, notice to produce, or you can ask them face-to-face in a deposition.
The failure to disclose where the money currently is held will result in the court denying them any ability to present evidence in their case.
If a party “unreasonably fails to comply with any provision…of the rules of this court (Discovery, Requests for Admission, and Pretrial Procedure) or fails to comply with any order entered under these rules, the court, on motion, may enter, in addition to remedies elsewhere specifically provided, such orders as are just, including, among others, the following:
(i) That further proceedings be stayed until the order or rule is complied with;
(ii) That the offending party be debarred from filing any other pleading relating to any issue to which the refusal or failure relates;
(iii) That the offending party be debarred from maintaining any particular claim, counterclaim, third-party complaint, or defense relating to that issue;
(iv) That a witness be barred from testifying concerning that issue;
(v) That, as to claims or defenses asserted in any pleading to which that issue is material, a judgment by default be entered against the offending party or that the offending party’s action be dismissed with or without prejudice;
(vi) That any portion of the offending party’s pleadings relating to that issue be stricken and, if thereby made appropriate, judgment be entered as to that issue.” Ill. Sup. Ct. R. 219(c)
If a spouse refuses to disclose assets, they will not be able to present any evidence as to whether they are entitled to those missing assets…or any other assets.
Bank withdrawal money went somewhere. Unless the money was withdrawn as cash, money always leaves a trail.
A spouse must disclose all of their assets under oath and the penalty of perjury.
Notices to produce require an affidavit of completeness. Interrogatories and Financial Affidavits must be signed under oath. A deposition must be conducted under oath.
Once the money’s location is identified, the Illinois divorce court can “divide the marital property without regard to marital misconduct in just proportions” 750 ILCS 503(d)
If the money has been spent or has somehow disappeared, you can still ask for your portion through a notice of dissipation of assets.
Dissipation Of Assets And Missing Money In An Illinois Divorce
Illinois divorce courts divide assets based on what they know. If some marital asset is missing, an Illinois divorce court can account for the missing asset when the court allocates the marital property between the parties.
An Illinois divorce court “shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors, including:
…
the dissipation by each party of the marital property” 750 ILCS 5/503(d)(2)
Dissipation of marital assets is the finding that a marital asset has been misspent or has gone missing but must still be accounted for in the final division of marital assets.
“Dissipation is defined as the use of marital property for one spouse’s sole benefit for a purpose unrelated to the marriage at a time when the marriage is undergoing an irreconcilable breakdown.” In re Marriage of Tietz, 605 NE 2d 670 – Ill: Appellate Court, 4th Dist. 1992
Unaccounted for money withdrawn from a bank account must be for “one spouse’s sole benefit for a purpose unrelated to the marriage”
You can only make a claim for dissipated assets within the last 5 years, 3 years from when you should have known about the withdrawal, and the withdrawal must have occurred after your marriage started to fail.
[A] notice of intent to claim dissipation shall be given no later than 60 days before trial or 30 days after discovery closes, whichever is later;
(ii) the notice of intent to claim dissipation shall contain, at a minimum, a date or period of time during which the marriage began undergoing an irretrievable breakdown, an identification of the property dissipated, and a date or period of time during which the dissipation occurred;
(iii) a certificate or service of the notice of intent to claim dissipation shall be filed with the clerk of the court and be served pursuant to applicable rules;
(iv) no dissipation shall be deemed to have occurred prior to 3 years after the party claiming dissipation knew or should have known of the dissipation, but in no event prior to 5 years before the filing of the petition for dissolution of marriage” 750 ILCS 5/503(d)(2)
If $ 50,000 goes missing from a bank account and there’s no good explanation for where it is, expect to be awarded an extra $ 25,000 when the remaining assets are divided by an Illinois divorce court.
The person accused of dissipation has the burden of proving what happened to the missing money.
“The general principle is that a person charged with the dissipation is under an obligation to establish by clear and specific evidence how the funds were spent. General and vague statements that the funds were spent on marital expenses or to pay bills are inadequate to avoid a finding of dissipation.” In re Marriage of Petrovich, 507 NE 2d 207 – Ill: Appellate Court, 2nd Dist. 1987
Unless they can prove with receipts that the missing money was spent on groceries, rent and other ongoing expenses, the missing money will be deemed dissipated…and remaining money will be distributed to the other party.
How To Handle Bank Accounts In An Illinois Divorce?
During an Illinois divorce spend the money in the existing bank accounts how you normally would spend money. Keep the receipts for what you bought. Do not take out cash withdrawals.
Incoming money can be put in a new bank account.
Money earned after the filing of a Petition For Dissolution Of Marriage is still marital and, thus, divisible.
‘[M]arital property’ means all property, including debts and other obligations, acquired by either spouse subsequent to the marriage” 750 ILCS 5/503(a)
However, money earned after the filing of a Petition For Dissolution Of Marriage can be considered by a court when equitably dividing assets.
An Illinois divorce court “shall divide the marital property without regard to marital misconduct in just proportions considering all relevant factors, including:…whether the contribution is after the commencement of a proceeding for dissolution of marriage or declaration of invalidity of marriage” 750 ILCS 5/503(d)(1)
By depositing all money earned after the filing of the Petition of Dissolution of Marriage in a separate bank account, the post-divorce contributions can be isolated and identified.
The previously existing bank accounts will be spent in short order from the regular expenses of the family well before the divorce is finalized.
If a bank account is at issue in your Illinois divorce case, contact my Chicago, Illinois family law firm to speak with an experienced Chicago divorce attorney.
