Divorce Without a Prenup in Wisconsin

Going through a divorce is always a turbulent time, filled with a wide range of emotions. That can make it difficult to focus on financial matters. In the moment, a hurting person can even think the finances are meaningless. It’s understandable to feel this way. That’s what makes a good attorney so much more valuable, because divorce without a prenup can leave you at long-term financial risk after the pain of the moment subsides.

The good news is this--the state of Wisconsin is a community property state. This means that, by law, all martial property must be divided 50/50. If you’re the spouse who stayed home with the kids, you get 50 percent of everything. If you’re the spouse who didn’t always get the big promotion at work, it doesn’t matter--you get 50 percent of everything.

So, it’s settled then, right? You get half and everyone goes home to rebuild their lives. Well, not so fast. You get 50 percent of everything in total, but not necessarily 50 percent of everything individually. And what “everything” is can be a source of serious legal contention.

What About the Inheritance?

Your favorite aunt had quite a bit of money and when she died, she left a good chunk of it to you. Is this part of the “everything” that will be split 50/50? Perhaps, but not automatically.

Strictly speaking, inherited monies and other gifts are considered exempt from the community property division. The key will be whether you kept the funds in a separate account. If you mixed them in with money that you and your spouse indisputably shared, they may be subject to 50/50 division.

But let’s say you inherited $200,000 and put it into a separate trust. If that’s the case, you can likely keep it. The exception to the rule would arise if a court determined you had what is called “donative intent”, that is, you took actions that indicated your intent to donate the money to the marriage.

For example, if you and your spouse used part of the money to buy a summer condo in Door County, that may be interpreted as you intending the entire pot to be part of the marital asset pool. Many cases are not cut-and-dry, and legal interpretation can have significant financial consequences if not made in your favor.

What About My Business?

If you started the business after you were married, it’s community property. It doesn’t matter if your spouse was involved or not. For that matter, it doesn’t even matter if they were supportive of the endeavor. If you filed the official documents to establish the business after the wedding, it belongs to both of you equally.

But what if it’s a family business that you stepped into? This is a different circumstance. Courts will look at a range of factors--if you and your spouse put a significant investment into the business that triggered a successful expansion, that can still point to community property. But if you stepped into running the company and your spouse simply worked there, then it’s unlikely the business will be classified as community property.

What if My Spouse Is at Fault for the Divorce and Admits it?

Wisconsin is a no-fault divorce state. This means that, in most circumstances, even if your spouse is the cause for the divorce--e.g., infidelity that they acknowledge--it really doesn’t matter when it comes to community property division.

The area where there could be an exception is if your spouse was clearly wasteful in depreciating your shared assets. If you can establish this for a court, it may be considered in how the property is split up.

Do We Have to Sell the House?

It’s common in community property division to sell the house and split the proceeds equally. But there may be valid reasons that one of the spouses doesn’t want to sell. Maybe the house has been in the family for a long time. Or maybe it’s simply a great place for the kids to grow up and you don’t want to cause them any more disruption. Not to worry, this can be worked around.

This is where it’s important to understand that the 50 percent division is based on the sum total of assets, not each one in particular. Maybe you want the house, but your spouse really loves that snowbird condo you bought in Arizona. You can split things up that way.

When it comes to dividing up retirement assets--401(k), IRAs, etc., it’s possible to negotiate different splits based on who values which assets. Or maybe your spouse bought some valuable art during the marriage that matters to them, but not to you. Good negotiation can protect your interests as these collective assets are divided equally.

Preparation Matters

All of this means that you need to have your paperwork in order. Important documents include:

  • W-2 or 1099 forms proving income
  • Monthly expenses
  • Bank statements
  • Investment accounts
  • Any contracts signed
  • Benefit statements
  • Outstanding debts & loan applications
  • Mortgage statements
  • Estate planning documents

We Can Help

You never imagined you’d be in this situation. But the law is designed to protect you, even without a prenup. Conversely, there’s enough gray area in the law that a good lawyer can help you fight for your rightful share of the community property pie.

Balisle Family Law Legal Counsel, S.C.has over four decades of experience working through the delicate and painful matters of a divorce settlement and getting our clients to a satisfactory conclusion. If you need a steady hand at the wheel, contact us either online or by calling (608) 765-1001.