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 is the term used during divorce proceedings to describe properties that were acquired after the marriage took place and are shared between both parties. These types of properties are eligible for division under state law.
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 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 property was acquired before the marriage by one spouse but has risen in value due to the efforts and/or labor of the other or both spouses, the appreciated value is considered marital property.
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 credit
- Avoid Wisconsin's marital property system
- 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.
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:
- Property owned by one spouse before marriage
- Any property given as a gift to just one spouse
- Property inherited by just one spouse
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.
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?
Retirement plans can be both included and excluded from the property division, it is based on the court's discretion.
In the case of Peterson v. Peterson, 126 Wis.2d 264, 376 N.W.2d 88 (Ct. App. 1985), the court of appeals made a ruling regarding retirement plans. If a retirement plan has not been used or contributed to and cannot be used for a long time, the court will not include that in property division. Retirement plans fall into the criteria that can be divided based on the discretion of the court.
How Does a Court View a Business When Looking at Marital Estate Property Division?
This issue came up in the case Ondrasek v. Ondrasek, 126 Wis.2d 469, 377 N.W.2d 190 (Ct. App. 1985) and the court of appeals said that generally, the value of a partner's interest in a professional partnership is determined by the fiscal consequences of one partner leaving the business. This also applies when weighing the interests of a shareholder. If a buyout agreement is an option, this will provide the trial court with a method of determining value.
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). 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). 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?
A likely scenario is that the court is including money into the property division that is due to be paid out as interest on a personal loan and was discovered during financial disclosure. On this occasion, If the money is in your possession, the court may count it towards property division. This isn't always the case, but it is at their discretion whether or not to count it.
This is best described in the case of Laribee v. Laribee 138 Wis. 2d 46, 405 N.W.2d 679 (Ct. App. 1987). In this case, among other factors, the court included $45,000 in the property division. This money was reportedly interest to be paid on a $30,000 loan from the husband's father. The husband appealed, the court of appeals affirmed.
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