What is the definition of marital property?

Community Property States

Community property is the property that is owned jointly by a married couple. There are nine community property states also known 50/50 states:

• Arizona
• California
• Idaho
• Louisiana
• Nevada
• New Mexico
• Texas
• Washington
• Wisconsin

If you live in one of the nine community property states, marital property and assets are presumed to be divided equally (50/50) upon divorce. The value of the assets, debts, belongings, etc., is assessed and distributed between the two parties. In certain unique circumstances, rather than splitting everything 50/50, the court will divide assets and debts based on what is equitable.

Short and Long-Term Marriage

There is no firm definition of what is considered a “short-term” marriage versus a “long-term” marriage. Some may argue that any marriage lasting less than 10 years is considered short-term, while a marriage lasting longer than 20 years is considered long-term.

In many states, the length of the marriage can impact what happens to marital property after a divorce. If a marriage is considered to be short-term, a judge may decide to restore each party to the assets and debts that party had before they were married.

Spousal support may be ordered to help maintain the status quo of the dependent or lower earning spouse after the marriage has come to an end.
When ending a short-term marriage, the court may order spousal support (also called maintenance) to a dependent spouse. Typically the shorter the length of marriage, the shorter the timeframe that maintenance will be paid. Ultimately many factors play into how much maintenance will be paid, and for how long it will be paid for. It will depend on disparity of earnings between the parties, and the needs of the person receiving support.. If it is a longer term marriage, there is a greater likelihood that spousal support will be paid by the higher earning spouse. It is possible, although not guaranteed, that the court may order indefinite spousal support. This occurs when no precise end date is established for the spousal support payments.

To be certain of the details according to your state’s divorce laws, your best course of action is to consult with an experienced attorney in your area.

Separate Property

Unless a prenuptial agreement is executed, Wisconsin law presumes that all property becomes marital property when a marriage becomes legalized – regardless of whose name is on the title and regardless of whether it was owned by only one party before the marriage There are only two exceptions to this rule which allow certain property to be separate property (or non-marital property):

• Third-party gifts (gifts between spouses are marital property)
• Inheritances

Separate property will remain the property of the individual to whom it was gifted or inherited. In the event of a divorce, the party may be required to provide proof that the property truly was gifted or inherited.

Co-mingling

To keep your non-marital property truly separate, be careful what you do with it. If you mix separate property with marital property, the separate property is considered commingled (permanently mixed) with marital property. Once it is commingled, it is all considered marital property and is subject to division in the event of a divorce.

If you receive a cash gift or inheritance and:

• Use the money to pay for marital property

• Pay off a marital debt

• Deposit the money into a marital account

The money becomes co-mingled and it becomes marital property. Furthermore, if the value of a piece of non-marital property increases, the added value may be considered marital property and may be divided upon divorce. Value can increase actively or passively. Typically only “active” value increases are subject to division.

For example:

• Active increase in value would be taking steps to renovate a property.
• Passive increase in value would be a bank account that grows because of interest.

Prenuptial Agreements

A prenuptial agreement is a contract made between two people before they get married. A prenuptial agreement outlines the details of how assets and debts will be divided in the event of a divorce.

Couples may create a prenuptial agreement if they want to avoid taking on their partner’s debt in a divorce. A couple may also create an prenuptial agreement with the hopes of simplifying any potential issues down the road by agreeing on the division of assets up front.

Ultimately, the goal is to protect the individual property rights of both parties in the event of a divorce.