Wisconsin Marital Property Laws
Wisconsin is known as a community property state. Everything acquired during the marriage will be divided equally after the divorce. This includes income, property, and debts. It doesn't matter who earns more or had less at the start of the marriage. If the spouses can come to an agreement, the court will consider it under an uncontested divorce.
What is the definition of marital property?
In the state of Wisconsin, marital property[1] is the term used during divorce proceedings to describe property that was acquired after the marriage took place. These types of properties are eligible for division under state law. It does not matter if only one party’s name is titled on the property; individually titled property is still considered marital property in the state of Wisconsin.
Marital Property
Simply put, marital property is property acquired by either spouse after two parties are married. In the event of a divorce, the court has the authority to distribute marital property and no authority over individual property.
Property acquired by one spouse before marriage is considered the individual property of the spouse who acquired it. However, property can lose its “individual property” status if it has been co-mingled with marital property. For example, if one spouse inherited cash from a deceased parent, and the spouse deposits such funds into a joint marital checking account, the funds are all comingled and now considered marital.
Property inherited or given as a gift by a third party is considered individual property. Keep in mind that although inherited and gifted property is considered separate property, if it is co-mingled with marital property it loses its separate property status. For example, if inherited money is deposited into a joint bank account it is very likely that it is considered marital property.
What is a marital property agreement under Wisconsin law?
A marital property agreement is a term that the state of Wisconsin uses to describe a standard pre or postnuptial agreement. In these agreements, decisions are made regarding the division of marital property in the event of a divorce. Marital property agreements are flexible and can be revised under applicable state law.
Benefits of a marital property agreement:
- To distinguish individual debts and liabilities
- Avoid Wisconsin's marital property laws requiring equal division of assets
- Partially or completely separate property, as individual property
- Reclassify individual property as marital property.
It's important to use a professional to help you draft a marital property agreement. If the prospective agreement makes only minor changes to the Wisconsin community property law, it is likely safe to hire one attorney to work on both spouses' behalf. However, if an agreement will overwhelmingly benefit one spouse over the other it is important for both parties to hire separate attorney's to draft the document. As a general rule, it is best for each spouse to have their own attorney.
Can Married People in WI own separate property?
Yes. Under certain circumstances, it is possible for two married people to own separate property. Examples of property which is not subject to community property laws include:
- Any property given as a gift to just one spouse
- Property inherited by just one spouse
- Property identified as separate/individual property by a prenuptial or postnuptial agreement
It's important to remember that it is far more likely that the marital property will be subject to community property laws rather than qualify as separate property. This is true even when only one spouses name appears on a title or deed. In some instances, property owned by one spouse before the marriage can be considered as community property if that property can be shown to have benefitted both individuals during the marriage.
Complicated right?
It's only natural to enter the divorce process with a laundry list of questions. We recommend discussing your property rights with an expert that knows the law inside & out, and you can trust to act in your best interests.
As with most things in a divorce, the Wisconsin marital property laws are generally fair and reasonable, allowing for the easy division of property if both parties are in can come to an agreement. However, if the parties are not in agreement, the circuit court will divide the marital estate upon granting the judgment of divorce.
Although it can be difficult, the fairest property settlements are typically achieved through negotiation facilitated by qualified trustworthy attorneys.
Are Retirement Plans Included in Marital Estate?
Yes, retirement plans are considered part of the marital estate.
As with nearly all “rules of thumb” in divorce, there are exceptions to this rule. In the case of Peterson v. Peterson, 126 Wis.2d 264, 376 N.W.2d 88 (Ct. App. 1985),[2] the Court of Appeals ruled that a retirement account that was not contributed to during the marriage and could not be accessed for several years should not be divisible in the divorce. Every case is unique and the specific facts of each case will determine the outcome; therefore, it’s important to not make assumptions and to get good advice from a qualified attorney.
Can Proceeds From Property Division Be Double Counted as Income?
Of course, courts will look at a multitude of factors when deciding spousal support. Ultimately, the devil is in the details because each case is completely unique.
Double counting is usually attributed to a mistake in calculating income in regards to support, maintenance, property division, etc. One example of this is found in the case of Overson v. Overson 125 Wis. 2d 13, 370 N.W.2d 796 (Ct. App. 1985).[4] In this situation, among other aspects, the wife appealed a predetermined award of maintenance. The husband cross-appealed based on an erroneous miscalculation, double-counting the sale proceeds after considering the property that was sold while calculating the maintenance award. The court decided that they did in fact double-count, and reversed the amount of maintenance based on that finding.
Can I Get a Stay of Enforcement of Property Division If I Can Prove the Court Made an Error?
You may make a request for a stay of enforcement for property division, however, there are several things the court may ask for. One thing being evidence that you will introduce at the appeal. Second, a statement that lends support to your claim of error. If you cannot produce these things you may still appeal the decision, but a stay of enforcement may not be granted.
This is seen in the case of Leggett v. Leggett 134 Wis. 2d 384, 396 N.W.2d 787 (Ct. App. 1986).[5] In this instance, proof and support were not produced, therefore a stay of enforcement was not granted.
Can the Court Include Money in the Property Division When It Is Being Paid Out?
Courts may include money being paid out in property division, but the specific circumstances and nature of the payments matter significantly.
Wisconsin courts have broad discretion to determine what constitutes marital property subject to division. Under Wisconsin Statute § 767.61(3)(j), courts may consider “other economic circumstances of each party, including pension benefits, vested or unvested, and future interests.”
In Laribee v. Laribee, 138 Wis. 2d 46, 405 N.W.2d 679 (Ct. App. 1987),[6] a husband claimed that $45,000 paid to his father was interest on a $30,000 family loan. However, the court found this was not legitimate interest because: the original loan had no stated interest rate, no payments were made for years, the husband didn't claim tax deductions for the interest, and his parents didn't report it as income. The court included the $45,000 in the marital estate, and the Court of Appeals affirmed this decision.
This case illustrates that courts will scrutinize claimed payments and may include questionable transfers in property division when they appear to be attempts to move marital assets rather than legitimate obligations.
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Frequently Asked Questions
What is considered community property in Wisconsin?
Community property is anything owned by both parties. That includes anything from retirement accounts to the mortgage to a business. Some things can be considered separate property if they were owned before the marriage.
Does Wisconsin recognize community property?
Wisconsin does recognize community property. Community property, also called marital property, is anything acquired during the marriage.
Non-marital property can also be commingled during the marriage and become community property. A non-marital asset is commingled if it is shared between the spouses.
How long do you have to be married to get half of everything in Wisconsin?
You will get half of everything that was acquired during the marriage no matter how long the marriage was. However, in short-term marriages, the court is less likely to give you property that was bought with premarital funds. In a long-term marriage, such as one over 20 years, the court may even consider assets from before the marriage to be marital assets.
How is marital property divided in Wisconsin?
Marital property is divided 50/50. You can use our property division worksheet to divide your marital property. It outlines common assets and debts to make sure you don’t forget anything important. For smaller things like household items, you can create a list of everything important, approximate a value, and divide them up between the two of you.
What is considered non-marital property in Wisconsin?
Non-marital property is property acquired before the marriage or through an inheritance. Something like an inheritance can be commingled if it is put into a jointly held account or used to buy a marital asset. If you want to protect your non-marital property, keep it completely separate from your spouse.