The Wisconsin Uniform Marital Property Act was enacted to reflect the belief that what a couple acquires during their marriage belongs to them equally. The law recognizes that each spouse makes equally important contributions to the success of the marriage. These contributions are acknowledged through equal ownership of any assets acquired. The law took effect January 1, 1986.
Marital property includes all the income and possessions of a married couple. Each spouse owns them equally. Certain items may have only one spouse’s name on the title. That isn’t proof that only the named spouse owns the item, but it does generally give that spouse the right to manage and control the item. He or she has a duty to treat the unnamed spouse fairly. All property is presumed to be marital property unless you can show that it should be classified some other way. Other classifications include individual property -generally, property one spouse owned before getting married, gifts or inheritances, no matter when they were received, also are individual property; deferred marital property -anything that would have been classified as marital property except for the fact that it was acquired before January 1, 1986. When the acquiring spouse dies, the other may have up to half of this deferred marital property. The other half is distributed according to the deceased spouse’s will, Survivorship marital property is property that goes directly to the surviving spouse upon the death of the other. It isn’t subject to the probate process.
Yes. If you mix marital and individual property, both will be presumed to be marital property. If you wish to preserve individual property, you must keep detailed records that will allow the individual property to be traced. Some examples of mixed property include a bank account started with individual funds that becomes mixed as interest accumulates, an inherited apartment building that becomes mixed as rents are used to payoff the mortgage, an unincorporated business owned be- fore the marriage may become mixed if a spouse continues to operate and expand it, and an increase in the value of individual property.This last example only is true in certain instances. A significant increase in value becomes marital property when it is the result of substantial efforts by either spouse, for which that spouse receives no compensation. For example, if a wife builds an extra room onto a cabin individually owned by her husband, the amount the cabin appreciates because of the addition becomes marital property. Marital and individual property now are mixed. However, when individual property increases in value because of inflation or changes in the market, that increased value remains individual property.
The principle of “equitable division” already was being applied to divorce property settlements before the Marital Property Act was passed. When “no fault” divorce went into affect, all property other than gifts or inheritances began to be divided 50/50, with some latitude for adjustments in special cases. The Marital Property Act was not intended to have any effect on divorce.
The law may change the effect of your will. Your estate will include all your individual property plus half of all marital property, regardless of title. Depending upon the wording of your will, you could pass your half interest in property that is titled in your spouse’s name to someone else, thereby creating a type of co-ownership, so old wills should be reviewed in light of the marital property law.
All your estate will go to your surviving spouse unless there are children from a prior marriage. If there are children from a prior marriage, half your estate will be split equally among them. The other half will go to your spouse.
Life insurance and pension plans have special rules, because you often pay into them both before and during your marriage. Formulas are spelled out to calculate which portions are marital property and which are individual property. A nonemployee spouse has a marital property interest in a pension plan only while alive. So if the nonemployee spouse is the first to die, he or she cannot will away half of the surviving spouse’s pension plan.The death benefit of a life insurance policy is marital property if paid for with marital property. So a surviving spouse has an interest in the death benefit even if he or she isn’t a named beneficiary. This may be critical in second marriages if each spouse wishes to name children of the first marriage as the beneficiaries. A special agreement must be made in these situations.
Debts incurred during your marriage and while both of you reside in Wisconsin are presumed to be in the interest of your marriage or family. For a debt that meets these conditions, a creditor can go after all marital property you and your spouse own, plus the individual property of the spouse(s) who created the debt. If you and your spouse are separated or cannot agree on money matters, you may be wise to limit your liability for each other’s debt. This can be done through a marital property agreement. In addition, you must inform each creditor of the terms of your agreement before any debt is created.
Acting alone, a spouse may give up to $1,000 per year of marital property to a third person. Unless they are quite wealthy, both spouses must act together to give larger amounts. Some couples like to give their children amounts equal to the state and federal maximum annual exemptions for estate tax purposes. These couples should remember that if the gifts are made from marital property, both spouses will probably have to consent.
Yes. To avoid the marital property system, spouses can enter into a marital agreement that reclassifies all or part of their property. Both would then have control of their individual property, as they did before the law was passed. The agreement must be in writing and voluntarily signed by both spouses. It must fairly and reasonably disclose their assets and liabilities at the time the agreement is made.You can have an attorney help draft the marital agreement, or you can use the statutory form. If you share an attorney, it’s wise to state in the agreement that you don’t want separate attorneys.
The law provides a number of remedies that you can seek in court. They include an accounting of your financial situation; having one spouse’s name added to a title document, which restricts management and control rights of the other spouse; and classifying property to determine how much belongs to each of you.You also can get property back or get a reimbursement from a third person if your spouse tries to transfer more of the marital property to that person than the law allows.
Yes. This is one of the purposes of the marital property law. To determine whether one spouse qualifies for credit, a creditor must consider all marital property, including the income of the other spouse. Future income is the marital asset most often used to qualify for credit. Any income earned after a marriage ends (whether by death or divorce) is not marital property. A creditor can only go after the marital property or income of a spouse who signed for the credit. So many creditors will want to protect their interests by asking both spouses to sign. This will enable them to go after the future income of either spouse if the marriage ends.