If you are new to the divorce process, you may have heard that Wisconsin requires divorcing couples to split everything 50/50. It’s easy to see why people get this impression, but it’s not exactly true.
In this blog post, we’ll discuss how Wisconsin handles property division in divorce.
Wisconsin follows a community property model in marriage and divorce. This means that, with a few exceptions, everything acquired by either spouse during the marriage is their community property, meaning it is jointly owned by both spouses.
Each spouse has an equal ownership right to anything in the community property and so, technically, they can split it 50/50 in divorce. In reality, the picture is usually much more complicated than that.
Many types of property can’t be simply divided in half. If, for example, the family home is part of the community property, then the spouses must sell the home and divide the profits or negotiate a way to buy out one spouse’s share and let the other keep the home.
In Wisconsin under sec 767.61 there is a presumption that all assets brought to the marriage or acquired during the marriage will be split equally between the spouses. However, the presumption can be rebutted by a series of statutory factors such as the length of the marriage, the property brought by each spouse to the marriage, the contribution of each party to the marriage, the contribution of each party to the career advancement of the other party, the health of the parties, tax consequences and other factors.
In Wisconsin the only property presumed separate is inheritance or gifts from a third party to one of the spouses. The court will consider that to be separate and not subject to division if it can be adequately traced back to the gift or inheritance. However, every rule has its exception. Therefore, if the court determines it would cause “hardship” on the other spouse, the court can make that finding and make that property subject to division.
The rules we’ve discussed so far may seem fairly straightforward, but these questions can become quite complicated when they involve commingled property, which is sometimes known as quasi-community property.
It’s quite common for married couples to share a piece of separate property during the marriage as though it was community property. For instance, one spouse might have separately inherited $20,000 from a deceased relative and then deposited it in a joint investment account with their spouse. That account earns interest over a period of a few years, and the couple draws on it when it’s time for them to purchase a new car. Later, they decide to divorce. Is the investment account separate property? Is the car separate property?
In this type of scenario, a court would likely find that both spouses have some property interest in the investment account and the assets it helped to purchase, but probably not a 50/50 interest. Likewise, if the couple negotiate a settlement out of court, they must find a way to divide those assets.
And, as if the above weren’t complicated enough, let’s remember that debts as well as assets are subject to property division in divorce. Like assets, debts can be considered separate or community property. Debts can also become quasi-community property in some circumstances.
As we have seen, Wisconsin’s community property law leads to results that are lot more complicated than a 50/50 split. And for some types of property, even a 50/50 split is easier said than accomplished.