If you are in the midst of divorce or legal separation in Wisconsin, you have probably heard the phrase, “Wisconsin is a community property state.” This means that, by default, the Wisconsin Court will divide marital property equally between divorcing or separating spouses. Everything you and your spouse own is presumed to be owned by both of you, regardless of whose name is on the account, title, deed, debt and so on. However, there are some exceptions to this rule, and if you are seeking a divorce or legal separation in Wisconsin, it is important to know how the marital property law works, to ensure that your property rights are protected.
By Wisconsin statute, there is a presumption that all assets acquired during the marriage will be divided equally, upon divorce or separation. There are two exceptions to this rule, by law: inheritances and gifts. If you were given a gift or inherited an asset during the marriage, those assets could be considered separate property and excluded from division, upon divorce. If you inherit an asset or are given a gift, you will need to prove that the inheritance or gift should be excluded. To do this, you will need to show that the inheritance or gift was kept separate from marital assets. In other words, you cannot commingle a separate asset and a marital asset; if you do, you run the considerable risk of having the Court decide that your inheritance or gift is marital property. Separate property can be converted into marital property, unless you take steps to prevent commingling.
To illustrate the above, here is a list of DO’s, if you inherit property or are given a gift, during the marriage:
- DO create a separate bank account, into which you deposit any gifted or inherited cash or monetary asset;
- DO create a separate investment or retirement account, in your sole name, in which you invest gifted or inherited funds;
- DO make sure that you obtain documentation from the estate of the deceased, showing, with specificity, what you inherited;
- DO make sure that you obtain documentation of any substantial gift given, like a letter stating that the gift is intended to be given to you, solely;
- DO make sure that any gift given to you is given to you alone, and not also to your spouse
And here is a list of DON’Ts:
- DON’T deposit inherited or gifted funds into a joint bank account;
- DON’T use inherited or gifted funds as a down-payment on a marital home or to purchase a marital asset;
- DON’T title an inherited or gifted asset in both your name and your spouse’s name;
- DON’T place inherited or gifted funds into a joint investment account;
- DON’T use inherited or gifted funds to pay down marital debts.
There is case law to suggest that personal injury settlements are also separate property. If you receive a personal injury settlement, you should treat it the same as though it were a gift or an inheritance, to avoid commingling.
Wisconsin marital property law provides for certain factors that allow for a deviation from the presumption of an equal division of property. The Court may weigh and assess these factors when making an Order for the division of the marital estate. The Court could determine that a strictly equal division would be unfair or unequitable to one of the parties. Spousal misconduct is NOT one of these factors; the Court will not take into consideration things like adultery, abandonment or abuse, when allocating property, upon divorce or legal separation. These factors include things like the length of the marriage, whether one party has substantial separate assets, the age and physical health of the parties, whether one party contributed to the education and earning capacity of the other. One important factor is the property brought to the marriage by each party. While gifts and inheritances are the only statutory exceptions to the presumption of equal division per Wisconsin law, there is an argument to be made that, if you came to the marriage with substantial assets, you should have those assets returned to you, upon divorce or legal separation. This argument is stronger when the marriage is of shorter duration. If you have been married for a long time, you should not expect to have your pre-marital assets returned to you, in full. The longer your marriage, the more the Court will see your pre-marital assets as irrelevant, and the more the marital estate will be considered all-inclusive.
Determining how Wisconsin’s marital property law will play a role in a divorce or legal separation is an important component of any case, and you should undertake this analysis with the assistance of an experienced family attorney. We specialize in family law and would be happy to discuss, with you, the unique facts and circumstances of your case. Feel free to contact us, to set up a free half-hour telephone consultation.