Although Wisconsin is a community property state, which means couples split assets 50/50 in a divorce, the court has discretion to consider various factors when deciding what is fair and equitable when dividing marital assets. Two significant factors that the court will consider are the length of the marriage and the property each spouse brought into the marriage.
For short term marriages, anywhere from 5 to 7 years, any property accumulated during the marriage would be subject to division BUT the spouses’ premarital assets would likely be restored. For marriages of longer duration, the assets may be subject to 50/50 property division unless there was some legal designation of them being separate property such as a prenuptial agreement or if one party inherited assets in their name alone.
Keep in mind that any separate property would have had to be maintained as separate property meaning not mingled with marital property. If separate property is ‘transmuted’, or converted, to marital property, even inadvertently, it is more likely to be subject to division.
Say, for example, you have your career on track and have accumulated substantial assets in bank accounts and brokerage accounts. If you decide to marry, it is in your best interests to get a prenuptial agreement designating these assets as separate property if that is your intention. With or without a prenuptial, it is also very important to maintain these accounts in your own name opting to open new accounts for you and your new spouse to share. Do not dip into these separate funds to purchase assets during the marriage or pay for household expenses and do not use income earned after the marriage to pay for separate debts or maintain separate property. Separate means separate – mixing assets together can result in separate property converting into marital property subject to division in a divorce.
What if Separate Property Appreciates During the Marriage?
If separate property appreciates during the marriage – perhaps a rental property you owned and maintained separately or a separate stock portfolio – the increase in value during the marriage may be subject to distribution especially if such an appreciation resulted from your active efforts during the marriage or your spouse’s efforts for that matter.
If you have ownership interest in a business, particularly in the absence of a prenup, structuring buy-sell, operating or other agreements to restrict a spouse’s ownership in the business is a must. If you and your spouse become business partners during the marriage, it is good to agree ahead of time what will occur in the event of a divorce right down to who will leave the business, how the spouses interest will be valued, how a spouse’s interest will paid for, and a schedule of payments.
If you have questions about short term marriage versus long term marriage and the division of marital property in a Wisconsin divorce, contact the Milwaukee and Waukesha divorce and property division attorneys at Probst Law Offices by calling 414-210-3135 for answers today.