Property Division at Divorce
Wisconsin takes the adage “what is mine is yours,” quite seriously when it comes to marriage as it is a marital property state. Marital property means any asset obtained during the marriage belongs to both spouses. If the spouses choose to divorce, the property should be split 50/50, right? It depends. Although a 50/50 split is the general rule, the fun part of the law is that every rule has an exception.
To back up a step, property division upon divorce, annulment, or legal separation can occur in two ways: through an agreement by the parties or determined by a judge. If spouses do not want to follow the marital property rule, the spouses do not need to if an agreement is made between them. This agreement must be fair to both parties and will become legally binding.
When parties fail to agree on a property division, the courts and the law take control. First, all property that was inherited or gifted to a spouse from a third party before or even during the marriage is excluded. For example, if during the marriage Grandfather died leaving Husband $100,000, the money belongs to Husband, not the marriage. The same would be true if Grandfather gave Husband the money as a gift. However, this gift can be considered marital property if a spouse has commingled it with marital property making it difficult to tell what is marital property and what is the individual spouse’s property. Continuing the example above, if Husband put the $100,000 into the spouse’s joint savings account and used the money to remodel the house, the court may find this to be marital property.
After all gifts and inheritance are removed, the court will decide if the remaining property should be divided equally. The court is allowed to stray away from this presumption based on a list of factors such as the length of marriage, whether one spouse has substantial assets not subject to division, and the age and physical health of the spouses. Any factor a court may find relevant for the specific case can be used. In the above example, the fact the Husband inherited a house that is not marital property may be a factor the court weighs in its decision and may result in the Wife getting more than 50% of the marital assets.
In understanding assets subject to division, the broad definition of property should be kept in mind. Property is more than just your house. It includes bank accounts, retirement accounts, vehicles, yard tools, and baseball card collections. Marital property is not just limited to assets spouses want; debt is included as well. Mortgages, credit card debt, and Junior’s medical bill from when he fell off his bike are all subject to division by the court. Additionally, whichever spouse accrued the debt is irrelevant, it is presumed to be marital property. If Wife created $50,000 in credit card debt due to her love of shopping, this debt is presumed to be Husband’s debt as well.
With marital property, Wisconsin’s laws want to ensure both spouses leave the marriage on basically the same footing. The general rule is that property should be split 50/50. Allowing a court to deviate from this general rule allows the flexibility to ensure property division remains fair.
If you have any questions about property division during your divorce, Jennifer can be reached at the Eau Claire and Menomonie office at 715-839-7786 and Evan can be reached at the Wausau office at 715-845-8234. You can also visit our website at www.weldriley.com.