In re Marriage of Bailey, 2025 IL App (3d) 240282-U

Summary

Case Summary: In re Marriage of Bailey, 2025 IL App (3d) 240282-U - In Bailey, the Third District held that a trial court commits reversible error by striking a statutorily compliant dissipation notice wholesale—even one filed nine days before trial—because the proper remedies are targeted measures like continuances or limiting orders, not outright elimination of the claim. The case also reinforces that nonmarital tracing survives appellate review when supported by a complete documentary chain (settlement statements, deposit records, endorsed checks), while attorney-fee payments from marital funds will not be retroactively treated as advances absent a contemporaneous court order establishing that characterization.

The opposing counsel in your high-net-worth dissolution just filed a sloppy dissipation notice nine days before trial, listing every transaction your client made since 2019. They expect the judge to strike it — and in In re Marriage of Bailey, 2025 IL App (3d) 240282-U, the trial court did exactly that. The Third District reversed. Your opposition just blinked, and they don't even know it yet.

This case, decided April 1, 2025, is a nonprecedential Rule 23 order — but it delivers a tactical blueprint that every Illinois family law practitioner handling significant assets needs to internalize immediately. It touches three pressure points that dominate contested dissolutions: procedural gamesmanship around dissipation claims, the tracing of inherited funds through commingled accounts, and the quiet war over whether attorney-fee payments constitute marital advances.

Let me break down what happened, what it means, and how you weaponize it.

The Facts: Florida Inheritance, a Garfield Avenue Home, and a Last-Minute Dissipation Notice

Adrienne Bailey (petitioner-appellant) and Joseph F. Bailey (respondent-appellee) were in a contested dissolution. The central asset dispute involved approximately $90,905.08 in proceeds from the sale of Florida real estate that Joseph claimed he inherited. Joseph deposited those funds into a Citibank account and subsequently used them to purchase a home on Garfield Avenue.

Adrienne filed a notice of intent to claim dissipation. The problem: she filed it nine days before trial, and it catalogued a broad range of transactions. The trial court struck the notice as untimely and prejudicial. At trial, the court found the Florida-sale proceeds were Joseph's nonmarital inheritance, that he had traced them with sufficient clarity, and that the Garfield Avenue home was therefore nonmarital property. The court also addressed attorney-fee payments without treating them as marital advances.

Adrienne appealed. The Third District affirmed in part, reversed in part, and remanded.

Issue One: The Dissipation Notice Strike Was Reversible Error

The trial court's decision to strike the dissipation notice outright was the headline reversal. The appellate court applied de novo review to whether the notice complied with the controlling statute and concluded it was technically timely under the statutory deadline.

The court acknowledged that trial judges have broad discretion to manage proceedings and police fairness. Filing a sprawling dissipation notice days before trial is aggressive litigation conduct. But the Third District drew a hard line: wholesale striking is the wrong remedy. The appropriate tools are targeted — discovery extensions, continuances, limiting orders, or requiring the claiming spouse to narrow and substantiate specific categories of alleged dissipation.

This distinction matters enormously in practice. The court essentially held that a technically compliant notice cannot be killed on arrival simply because it is inconvenient or voluminous. The trial court must use a scalpel, not a sledgehammer.

Strategic Takeaway for the Filing Party

File your dissipation notice as early as possible. Statutory compliance is your floor, not your ceiling. When you list transactions, provide granular detail: date, payee, amount, and the category of alleged dissipation. A notice that reads like a forensic accounting report is harder to strike than one that reads like a fishing expedition. If you are forced to file late — because discovery revealed the dissipation late, or because opposing counsel stonewalled production — document the reason for delay in a contemporaneous filing. You want the record to show diligence, not ambush.

Strategic Takeaway for the Defending Party

Stop relying on a blanket motion to strike as your primary defense. After Bailey, that motion is weaker than it was last year. Instead, if you receive a late or broad dissipation notice, move for a continuance (which shifts the cost and delay onto the filing party), demand immediate and specific discovery responses on each claimed transaction, and seek a limiting order that forces the claimant to identify their strongest categories of dissipation and abandon the rest. Make the court's fairness analysis work for you without asking the court to do something the Third District just said was error.

Issue Two: Tracing Inherited Funds — The Chain That Held

Joseph's defense of the Garfield Avenue home as nonmarital property succeeded at trial and survived appellate review under the manifest-weight standard. The appellate court found that the trial court's factual findings were supported by settlement checks, bank statements, and credible testimony establishing that Joseph received one-third of each Florida-property sale as an inheritance and deposited those proceeds — totaling approximately $90,905.08 — into a Citibank account.

This is a textbook application of the tracing doctrine under Illinois law. Nonmarital property retains its character if the owning spouse can trace it through subsequent transactions by clear and convincing evidence. The presumption that property acquired during marriage is marital is powerful, but it is rebuttable — and Joseph rebutted it.

What Made the Tracing Work


Settlement statements from the Florida sales — These established the source of the funds as inherited real estate, not marital earnings.
Checks showing Joseph's one-third share — The documentary evidence matched the inheritance claim and eliminated ambiguity about whether the funds were gifts, loans, or joint proceeds.
Citibank account records — Deposit records tied the inherited funds to a specific account, and the subsequent purchase of the Garfield Avenue home could be traced directly to withdrawals from that account.
Credible testimony — Joseph's testimony was consistent with the documentary record. The trial court found him credible, and the appellate court deferred to that credibility determination.


The lesson is architectural. Tracing is not a narrative exercise — it is an evidentiary construction project. Each link in the chain must be documented. If you represent the spouse claiming nonmarital character, build the chain before trial with forensic precision. If you represent the opposing spouse, attack every link: Was the account commingled? Were marital funds deposited into the same account? Were withdrawals used for marital purposes before the home purchase? Did the inherited funds lose their identity through mixing?

The Cyber-Discovery Angle

In an era where financial transactions leave digital footprints across banking apps, payment platforms, cryptocurrency wallets, and cloud-based accounting software, tracing disputes are increasingly won or lost in electronic discovery. If your opposing party claims nonmarital character for funds that passed through digital accounts, you need forensic analysis of those accounts — not just the paper statements they choose to produce. Subpoena the institution directly. Demand metadata. If the opposing party used personal devices to manage finances, those devices may contain evidence of commingling that sanitized bank statements do not reveal.

Conversely, if your client is the one tracing inherited funds, ensure their digital records are preserved and organized before litigation. A client who deleted their banking app, lost access to old email confirmations, or failed to preserve screenshots of transfer confirmations has just handed the other side an argument that the chain is broken.

Issue Three: Attorney-Fee Payments and the Marital Advance Question

The appellate court's treatment of the attorney-fee issue in Bailey is a reminder that trial courts retain significant discretion over fee allocations in dissolution proceedings. The court did not treat the fee payments at issue as marital advances — and the appellate court did not disturb that determination.

The practical implication is direct: if you want attorney-fee payments from marital funds to be treated as advances against the paying party's share of the marital estate, obtain an express court order to that effect at the time the fees are paid. Do not assume the trial court will retroactively characterize those payments as advances during the property-division phase. File a motion. Get the order. Put it on the record. Ambiguity on this point benefits the party who paid the fees, because the burden shifts to the objecting party to prove the payments should be credited back to the estate.

Procedural Preservation: The Quiet Win

The appellate court addressed a waiver argument and concluded that Adrienne had preserved her right to appeal. The court treated the order striking the dissipation notice as a procedural step leading to the final judgment under the reasoning of Burtell v. First Charter Financial Corp. This is a technical point, but it saved the appeal.

The lesson: include every dispositive pretrial order in your notice of appeal. If the trial court entered an order striking your dissipation notice, excluding evidence, or resolving a characterization issue before trial, and that order affected the final judgment, reference it explicitly. Failing to do so invites a waiver argument that can kill your appeal before the merits are reached.

The Integrated Playbook

Bailey is a nonprecedential order, which means it cannot be cited as binding authority. But it reflects the Third District's current analytical framework on three issues that arise in virtually every contested high-net-worth dissolution in Illinois. Here is the consolidated action list:


Dissipation notices: File early, file with specificity, and do not assume a late-but-compliant notice will be struck. If you are defending against one, seek targeted relief — not a blanket strike that the appellate court has now signaled is disfavored.
Nonmarital tracing: Build the documentary chain from source to deposit to purchase. Use forensic accounting and electronic discovery to either establish or attack each link. Settlement statements, endorsed checks, and account-level deposit records are the gold standard.
Attorney-fee advances: Get the order contemporaneously. Retroactive characterization is uncertain and discretionary.
Appellate preservation: Reference every material pretrial order in your notice of appeal. Assume nothing is automatically included.


The Power Dynamic in the Room

The judge already knows which side prepared and which side improvised. In a case like Bailey, the spouse who produced settlement checks, bank records, and a coherent tracing narrative won the characterization fight at trial and held it on appeal. The spouse who filed a broad dissipation notice nine days before trial lost the procedural battle below — but won the war on appeal because the statute was on her side.

Both outcomes reinforce the same principle: preparation is leverage. The party who controls the documentary record controls the narrative. The party who understands the procedural rules — and complies with them, even at the margins — forces the court to engage on the merits rather than disposing of claims on technicalities.

If you are litigating a contested dissolution involving inherited assets, dissipation claims, or significant fee disputes, the time to build your evidentiary architecture is now — not the week before trial. And if your opposition is already behind on discovery, already scrambling to trace funds they should have documented years ago, already relying on motions to strike instead of substantive defenses — that is not your problem. That is your advantage.

Book a strategy session with our team now. The other side is already losing ground they cannot recover. The only question is whether you press the advantage or let it evaporate.

Full Opinion (PDF): Download the full opinion

Written by Jonathan D. Steele

Chicago divorce attorney with cybersecurity certifications (Security+, ISC2 CC, Google Cybersecurity Professional Certificate). Illinois Super Lawyers Rising Star 2016-2025.

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