Who Gets the House in a Divorce in Wisconsin?

Dividing Property and Debt in Wisconsin

When dividing property in Wisconsin, both assets and debts are divided equally. As always when it comes to property division, if both parties can agree, the process goes much smoother. But, when parties cannot come to a mutual decision, the courts will divide property as equitably as possible. Most cases don’t get to that point where the court decides because most people like to make decisions for themselves.

Focusing on the Marital Home

Whether the house is going to be sold and split, kept and bought out, or shared and maintained–it’s rarely an easy decision. The marital home is often the largest piece of joint property considered in a divorce, so decisions surrounding the home aren't taken lightly. We recommend consulting with a family law firm such as Sterling Lawyers because once an agreement is signed and finalized, it’s really hard to go back and change your mind.

Below outlines the three main options when it comes to dividing the marital home:

• Sell the House
• Agree to a Buyout
• Co-Own the Home

Start Dividing Property & Debts

Get your WI property division worksheet here. Document property, assets, and debts. Think through how you want to equalize your property division, and avoid a lengthy battle in court.

Sell the House

If neither party wants the home or neither party can afford it on their own, then they can sell the house and split the profits. When thinking about selling the house, focus on two aspects, the financial implications and the emotional implications. Financial implications surround things like the mortgage and the realtor, but personal refers to those who lived there–kids or adults–and the sentimental value they hold in the home. Who sells the home and how any profits are split should be included in the marital settlement agreement.

What Is the Process if My Spouse and I Decide to Sell the Family Home?

Once the decision is made to sell the house, the financial aspects are the sole focus. First, assess the current market and decide whether now is a good time to sell the house or not. The house may need to be sold anyways but waiting may be the better option.

You will need to understand any debt associated with the house including the mortgage and any home equity lines of credit, so you can plan how to pay them off. This is also when you should look into capital gains taxes and any other taxes regarding the house.

Finally, prepare the house for sale by making any repairs or upgrades, contacting a realtor to help with the sale, and agreeing on an asking price.

Agree to a Buyout

Parties can agree to a buyout or trade where one party keeps the house, buys out the other party, and refinances the home in their name alone. A buyout is a great option when there is a substantial amount of other assets in the marital estate. When there are enough marital assets to balance out the home’s equity, the party keeping the house can exchange those assets for the other party’s share of the equity.

The disadvantages to this option are two-sided because the buyer could pay too much if the house depreciates in value or the seller could lose out on future appreciation of the property. There are then three common ways a buyout occurs:

1.) Give Up Other Assets

The most common buyout is where one party keeps the house in exchange for other marital assets, such as investments or retirement accounts. To do this fairly, a third party assesses the value of the house before the division occurs then spouses agree on what to exchange.

2.) Buyout Payments Over Time

A buyout can also be paid over a period of time. After a third party assesses the value of the marital home, buyout terms are outlined and included in the divorce and marital settlement agreement. Under these circumstances, co-ownership exists until the final buyout payment is made.

3.) In Place of Spousal Support

The third common option happens when spousal support (or alimony) is part of the negotiations. In this scenario, the spouse who would pay spousal support can “give” the house to the other spouse in exchange for not paying or paying significantly less spousal support.

Co-Own the House

The final and least common option is to continue to co-own the home. Most often this occurs when a buyout is being paid overtime, as mentioned above. Co-owning is uncommon because there are distinct financial disadvantages:

• Credit Reporting – Both parties will need to list the mortgage as an open expense which can lead to difficulty financing other purchases.
• Upkeep Costs – Both parties are responsible for tracking and splitting upkeep costs, which adds points of tension.
• Taxes – Though both parties are liable for the mortgage, only one party can claim the interest deduction on their taxes.
• Death – A living will is needed to protect against issues if one party were to pass away and creating that will is an added cost.
• Bankruptcy – If the other person were sued or filed for bankruptcy, it's difficult to protect yourself and your share of the property.

Considerations