Frequently Asked Questions About Divorce in Wisconsin

A divorce is a civil action to terminate a marriage.

Where should a divorce be filed?

A divorce action must be filed in the county where the person resides.  The person filing for divorce must be a resident of the State of Wisconsin for more than six months prior to filing the action; and a resident of the county where the divorce shall be filed for more than 30 days prior to filing the action.

Can both spouses use the same attorney?

Using the same attorney is not recommended.  An attorneys ethical obligation belongs to only one client, and the attorney cannot represent both spouses.  Both spouses have different interests.

What are the grounds for filing for divorce?

The only ground for divorce in Wisconsin is an irretrievable breakdown of the marriage.

What does a no-fault divorce mean?

A No-fault divorce means that it is not necessary, or permitted, to show that one party or the other did something wrong, or was at fault, such as committing adultery, desertion or abuse, to get a divorce.

How long does it take to get divorced?

In Wisconsin, a person may get a divorce 120 days after service of the summons and petition for divorce on the other party.  Generally, however, it takes longer than 120 days to complete a divorce.

How can a divorce settle out of court if an agreement can't  quite be reached?

Options available include: collaborative divorce, cooperative divorce, mediation and arbitration. 

A collaborative divorce is an unique approach to handling a divorce.  The parties sign an enforceable agreement requiring both attorneys to withdraw and transfer the case to other lawyers if the collaborative process fails.  The spouses work with attorneys to negotiate a mutually acceptable settlement.  Both parties are encouraged to communicate openly and to disclose information honestly and in good faith without the aid of formal discovery.

What is a cooperative divorce?

A cooperative divorce is very similar to a collaborative divorce except that the parties would only sign an agreement that is a statement of intent and would not be binding on either party.  Therefore, if negotiations fail, the parties would retain the ability to go to court without having to obtain new attorneys.

What is mediation?

The spouses meet with a neutral third party who is a trained mediator.  The mediator does not give legal advice to either party but gives legal information to help the two spouses reach an agreement.  Mediation is viable when the spouses believe they can settle their differences and are not hostile to one another.

What is arbitration?

Arbitration is the hiring of a private person, sometimes a retired judge, to hear the case.  Arbitration is generally final and binding on the parties and is incorporated into the judgment of divorce.

What are temporary orders?

Temporary orders are orders in effect on a temporary basis during the period from the commencement of the divorce until the divorce is finalized.  Issues addressed in a temporary hearing often include custody, placement, child support, maintenance, who resides in the marital residence, bill payment, etc.

What is discovery?

Discovery is the process of obtaining information from the other party. For example, information about other party's checking account or retirement plan could be obtained through discovery.

What if one party doesn' t agree with the Judge' s ruling?

In some instances, the spouse may appeal.  The lawyer can explain whether or not an appeal is viable. 

Yes.  Wisconsin courts are required to enforce the terms of an agreement unless the terms are considered inequitable as to either party.

In the event a party intends to get remarried after a divorce, he/she should consider entering into a pre-nuptial agreement.  Pre-nuptial agreements serve several different purposes, depending on whether the person has been married before or is getting married for the first time. Pre-nuptial agreements are especially important in cases where a spouse has children from a former marriage, owns a business and has a will or trust in place.  It can provide an additional layer of planning and protection for the party and his/her children.

Is common‑law marriage legally recognized in Wisconsin?

No. Some states recognize couples as married after they agree to marry and live together for a specified time even though they never formally marry. Wisconsin requires a marriage license and an official ceremony.

After filing for divorce, one spouse went into the other spouse' s email account and printed off a bunch of emails without permission.  Now that spouse is trying to use the information he/she got from the emails against the other spouse to get a better settlement.  Can this happen?

Most likely not.  Unauthorized access to opened and saved emails that are stored on computers through electronic communications services, such as Gmail, Yahoo! and Hotmail, may be a violation of the Stored Communications Act.  By taking information from email accounts without permission, the spouse may be subject to criminal charges as well as subject to civil monetary penalties.  In either case, the information taken from the emails may not be used as evidence.

LEGAL SEPARATION

If a person is legally separated from his/her spouse, are they still married?

In Wisconsin, there are no reported cases on whether a legally separated spouse is still married.  However, most attorneys agree that after a couple is legally separated, the couple is no longer married.  Unlike a divorce, if a spouse is legally separated and not subsequently divorced, he/she is unable to remarry for the remainder of his/her life.

What if a person is legally separated and later decides that he/she wants to be divorced instead.  Can that happen?

If the parties agree, the court can immediately convert the legal separation to a divorce anytime.  If the spouses do not agree, the court may only convert the legal separation to a divorce after one year has passed since the entry of the judgment of legal separation.

In addition, if a couple reconciles anytime after they are legally separated, the couple may attempt to revoke the legal separation.  On review of the circumstances, the court shall make an order revoking the legal separation if such an order is just and reasonable.

Why choose a legal separation instead of a divorce?

One advantage is that the residency requirement is shorter for a legal separation, and  allows a spouse to start a legal separation more quickly than a divorce.  For a legal separation, a spouse must be a residence of the county for at least 30 days.  But to file a divorce, a spouse has to be a resident in the county for 30 days and a resident in the State for at least 6 months. 

Additionally, some health insurance plans, by their contractual language, only terminate coverage for divorced spouses, but not for legally separated spouses.  Therefore, the non-employee spouse may continue health care coverage on his/her legally separated employed spouse's insurance.  In order to save money on obtaining new health care coverage, a non-employee spouse may pursue a legal separation instead of a divorce.

Further, some people are legally separated for religious reasons.

After a legal separation, can a spouse legally change her name back to her maiden name?

Wisconsin has no statutory provision specifically addressing a spouse's ability to legally change her name after legal separation.  Wis. Stat. Sec. 767.395 states that the court shall allow either spouse to change his/her name after granting a divorce.   A person may also formally petition to have a name change pursuant to Wis. Stat. Sec. 876.36. 

If legally separated, can the parties file a joint tax return?

No.  Generally, a person's filing status depends on whether he/she is considered married or unmarried.  According to the IRS, a person is considered unmarried for the whole year if, on the last day of the tax year, the person is either unmarried or legally separated from his/her spouse pursuant to a divorce or separate maintenance decree.  If legally separated, the IRS considers each person's filing status as single.

                  LEGAL CUSTODY AND PHYSICAL PLACEMENT          

What is the difference between physical placement and legal custody of children?

Physical placement is the condition under which a party has the right to have a child physically placed with that party and has the right and responsibility to make, during that placement, routine daily decisions regarding the child's care.  Wis. Stat. Sec. 767.001(5)  Physical placement is generally defined as where the child is living on a day to day basis.

Legal custody is the right and responsibility to make major decisions concerning the child, except with respect to specified decisions as set forth by the court or the parties in the final judgment or order.  Wis. Stat. Sec. 767.001(2)(a).  Such major decisions include where the children will attend school, religious decisions and medical decisions.

What are the different types of physical placement?

In most cases each parent is awarded periods of physical placement of the children. The actual placement arrangement may take one of three basic forms:

1)      Primary Placement: One parent has primary placement of the children.  The other parent has periods of placement which could take the form of every other weekend during the school year plus extra time in the summer. There is also usually an alternating of holidays.

2)     Shared Placement: Under Wisconsin law, parents have a shared placement schedule if each parent has at least 25% or 92 days a year of physical  placement with the minor children.  DWD 40.04(2).  The periods of physical placement are determined by calculating the number of overnights of each parent and dividing that number by 365.  An example of a shared placement schedule is a 50/50 alternating week schedule.

3)     Split Custody: Occasionally, and for a wide variety of reasons, children are split up between the parents, with each parent having periods of placement with the child or children primarily placed with the other parent. With split custody, the visitation schedules are usually set up to have the children together every weekend and for substantial times in the summer. There is a special split custody child support rule which offsets and nets the child obligations of the parents.

If one spouse thinks the other spouse is a lousy parent, will the court still allocate periods of physical placement to that spouse?

The court will want the children to spend time with both parents, and by statutory law must allocate periods of physical placement between the parties unless the court finds that physical placement with a parent would endanger the children's physical, mental or emotional health. Absolute denial of periods of physical placement is very rare.

The court shall set a placement schedulethat allows the child to have regularly occurring, meaningful periods of physical placement with each parent and that maximizes the amount of time the child may spend with each parent.

What are the different types of legal custody?

Legal custody may be sole or joint, or mixed sole and joint (joint in some areas but sole in others). Joint legal custody means both parents have a right to participate in major decisions affecting the children.  Sole legal custody means only the parent with legal custody has the right to decide major decisions affecting the children.  It may also be mixed sole and joint which means that the parents make joint decisions in some areas but not in others. For example, the parents may be required to discuss medical care of the children before decisions are made, but not religious decisions.

The court may grant joint legal custody if it finds that it is in the best interests of the children and either both parents request it or one parent requests it and the court finds all three of the following: 1) both parents are capable of performing parental duties, 2) no conditions exist which would substantially interfere with the exercise of joint legal custody, and 3) the parties will be able to cooperate in the future decision‑making required by joint legal custody.  Unless there is evidence of abuse in the relationship, the court presumes that joint legal custody is in the best interest of the child.

The court may grant sole legal custody if it finds that it is in the best interests of the children and that any of the following apply: 1) both parents agree to sole legal custody, 2) the parties disagree over sole legal custody, but at least one party requests sole legal custody and the court finds any of the following:

a)      One party is not capable of performing parental duties and responsibilities or does not wish to have an active role in raising the child.

b)      One or more conditions exist at that time which would substantially interfere with the exercise of joint legal custody.

c)      The parties will not be able to cooperate in the future decision making required under an award of joint legal custody.

Any evidence that domestic abuse has occurred either in the form of child abuse or interspousal battery or domestic abuse creates a presumption that the parties will not be able to cooperate in the future decision making and that joint legal custody is inappropriate. This presumption may be rebutted only by presenting by clear and convincing evidence that the abuse will not interfere with the parties' ability to cooperate in the future decision making required. Clearly, this is a difficult burden.

What kinds of factors does the court consider in granting custody and physical placement?

The court shall consider all facts relevant to the best interest of the child.  Some of the factors the court may consider are:      

1)      The wishes of the child's parent or parents as shown by an agreement between the parties, or a proposed parenting plan, or any other proposal submitted to the court at trial.

2)     The wishes of the child, which may be communicated by the child or the through the child's guardian ad litem.

3)     The interaction and interrelationship of the child with his or her parent or parents, siblings, etc.

4)     The amount and quality of time that each parent has spent with the child in the past.

5)     The child's adjustment to the home, school, religion and community.

6)     Whether the mental or physical health of a party, minor child, or other person living in a proposed custodial household negatively affects the child's intellectual, physical or emotional well-being.

7)     The need for regularly occurring and meaningful periods of physical placement to provide predictability and stability for the child.

8)     The availability of public or private child care services.

9)     The cooperation and communication between the parties and whether either party unreasonably refuses to cooperate or communicate with the other party.

10)    Whether each party can support the other party's relationship with the child, or whether one party is likely to unreasonably interfere with the child's continuing relationship with the other party.

11)     Whether there is evidence that a party engaged in abuse as defined by sec. 813.122(1)(a), of the child.

12)    Whether any of the following has a criminal record and whether there is evidence that any of the following has engaged in abuse, as defined in sec. 813.122(1)(a), of the child or any other child or neglected the child or any other child:

a)      A person with whom a parent of the child has a dating relationship, as defined in sec. 813.12(1)(ag).

b)      A person who resides, has resided, or will reside regularly or intermittently in a proposed custodial household.

13)    Whether there is any evidence of interspousal battery as described under sec. 940.19 or 940.20(1m) or domestic abuse as defined in sec. 813.12(1)(am).

14)    Whether either party has or had a significant problem with alcohol or drug abuse.

15)    Such other factors as the court may in each individual case determine to be relevant.

Can custody or physical placement orders be changed?

Yes.  But if one spouse tries to modify the order within two years after the final judgment, the court will only modify an order if the party seeking to modify the order shows that the current custodial conditions are physically or emotionally harmful to the best interest of the child.  The court, however, will generally make small changes to placement orders that do not significantly alter the current placement schedule without having to show there are conditions of physical or emotional harm.

If a spouse is attempting to modify the order after two years, the court may do so only if it finds all of the following:

1)      The modification is in the best interest of the child.

2)     There has been a substantial change of the circumstances since the entry of the last order affecting legal custody or physical placement.

A change in economic circumstances or marital status of either party is not sufficient to meet the standards for a substantial change under 2).

What if the wife gets pregnant during the divorce and the husband thinks the child is not his?

The husband is legally presumed to be the father of the child.  The husband or wife must notify the court of the pregnancy and the court will appoint an attorney to represent the best interests of the unborn child.  Based on testing and interviews, that appointed lawyer will recommend to the court whether or not husband is the father of the child.

                                                               CHILD SUPPORT

What is child support based on?

The Child Support Guidelines are based on:

1)      Parent's income;

2)     How much time a child spends with each parent; and

3)     Whether a parent is supporting other children.

What is considered income for calculating child support?

Gross income is defined as all income from any source. This income may or may not be taxable. Income can be in the form of money, property or services. Gross income includes:

1)      Wages, salaries, earnings, tips, interest, capital gains, commissions and bonuses;

2)     Worker's compensation or other personal injury awards intended to replace income;

3)     Unemployment insurance;

4)     Income continuation benefits and Social Security Disability Income (SSDI) payments;

5)     Voluntary contributions to retirement and cafeteria plans;

6)     Undistributed income of a corporation; and

7)     Military allowances and veterans benefits.

Gross income does not include:

1)      Child support received; and

2)     Public assistance payments such as Supplemental Security Income (551), W-2 cash payments or food stamps.

The court may also use the amount of income that a parent has the earning capacity to earn i.e - imputed income.  In determining earning capacity, the court can consider a parent's:

1)      Past earnings;

2)     Current physical and mental health;

3)     History of child care responsibilities of the parent with primary placement;

4)     Education, training and recent work experience; and

5)     Local job openings.

When will the court use the basic child support guidelines to calculate child support?

The basic child support guidelines are used when one parent cares for the child for more than 75% of the time (274 or more days per year).  The other parent will pay support based on his or her income.

The basic support guidelines are:

1)      17% of gross income for 1 child;

2)     25% of gross income for 2 children;

3)     29% of gross income for 3 children;

4)     31% of gross income for 4 children; and

5)     34% of gross income for 5 or more children.

Example:  Parent A cares for the child or children for more than 75% of the time. The chart below shows child support amounts at different income levels for Parent B. (Guideline percentage x gross monthly income.) 

Does the court ever use a different guideline to calculate child support?

Yes.  Depending on the circumstances of each case, there are several different guidelines that a courtmay apply to calculate child support.

                                                 Shared-Placement Guidelines

First, courts may use the Shared-Placement guidelines when each parent cares for the child at least 25% of the time (at least 92 days per year), and the placement time with each parent is in a court order.

1)      The court will order each parent to assume the child's basic support costs in proportion to the time that the parent cares for the child. Basic support costs are food, shelter, clothing, transportation, personal care and incidental recreational costs.

2)     The court must also assign responsibility for payment of the child's variable costs in proportion to each parent's share of placement. Variable costs are reasonable costs above basic support costs. These costs include child care, tuition and a child's special needs.

3)     Incomes of both parents are used to set the amount of support.

4)     The parent's share of placement determines that parent's share of support.

Example:  Parents have 2 children:

Parent A:      Monthly gross income is $2,000

Cares for both children 219 days a year (60% of the time)

Parent B:      Monthly gross income is $3,000

Cares for both children 146 days a year (40% of the time)

Determining a Parent's Share of Support:

                                                                                                                           Parent A   Parent B

*This amount does not include payments for the children's variable costs.

                                             Low-Income Payer Guidelines

Second, the court may use the Low-Income Payer Guidelines if the paying parent is not able to earn at least $950 a month.  Support amounts vary with parent's monthly income and number of children. The chart below shows support amounts at different income levels.

Examples for Low-Income Payer Cases:

                                                 High-Income Payer Guidelines

Third, the court may use the High-Income Payer Guidelines if the paying parent earns an income of more than $84,000 per year.

                                                         Serial Family Guidelines

Fourth, if a parent supports more than one family, the parent's available income for later child support orders maybe reduced.  The serial family guidelines only apply if the additional child support obligation incurred by a payer is the result of a court order and the support obligation being calculated is for children from a subsequent family or subsequent paternity judgment or acknowledgment.  If a parent is responsible to support more than one family (a child from a past marriage or new children from new marriage), consult an attorney to see if the parent meets the serial family guidelines.

Do the courts have to use the guidelines set forth above?

No.  A court may order a parent to pay more or less than the amounts set by the percentages above.  However, if the court decides that the income standard would be unfair to the child or one of the parents, the court must note the reason for not using the guidelines.

Is a court of law bound by what is put in the marital settlement agreement about the children?

No.  The court possesses the authority to alter or modify the agreement in the best interests of the children.  If, however, both parties mutually agree to custody, placement and child support in the marital settlement agreement, the court rarely alters the parties' agreement.  Only in certain circumstances, like if the Child Support Agency is a party to the action, will the court alter the parties' agreement. Otherwise, the court generally presumes that the terms concerning the children in the agreement are fair, reasonable and necessary for the best interests and welfare of the children.

Who pays the taxes on child support?

No one.  Child support is not taxable to the one who receives it, nor is it tax deductible by the one who pays it.

Why are child support guidelines based on gross income and not net income?

Gross income is a more accurate reflection of income.  Net income may be manipulated through the use of exemptions and deductions.

How long is child support paid?

Under Wisconsin law, a spouse's duty to support the child continues until age 18, or until age 19 if the child is still enrolled in high school or pursuing a high school equivalency course (GED).

Even if the order for current support ends, a spouse will still need to pay all past‑due support and past‑due fees owed (if any). Income withholding will stay in effect until the  past‑due support is paid.

When the parties' child is visiting one spouse, can that spouse reduce the child support paying to the ex-spouse?

No.

If one spouse cannot see the parties' children for visitation, can that spouse stop paying child support?

Can a spouse' s paycheck be garnished for child support?

Yes.

What if a spouse claims he/she needs more child support in the future?

If the child support is set out in a court order, the spouse may petition the court to increase child support if he/she can show that there has been a substantial change of circumstances.

What is a substantial change of circumstances?

Such a change usually consists of increased living expenses, inflation or an increase in the earnings of the other parent.

Can child support also be reduced?

Yes, if there has been a substantial change of circumstances.  For example, if the spouse has lost a job or had a substantial reduction in pay, that spouse could petition the court to reduce the child support payments.

                                                                        INSURANCE   

Is life insurance an asset?

If there is cash value, yes.  Do not confuse the death benefit with cash value.  Cash value is found in permanent policies such as whole life or universal life.  Term life insurance does not have cash value.

What is the COBRA law?

The Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) requires businesses with at least 20 employees to offer temporary extended health care plans to employees and their families in certain instances where coverage under the plan would otherwise end.  While several events can trigger the right to COBRA coverage, COBRA is important in some divorce cases because it permits a person to apply to his/her ex-spouse's health insurance company for continued health insurance coverage for 3 years after the parties are divorced.  The person applying for the continued coverage, however, is responsible to pay for the insurance.

May one spouse cancel another spouse' s car insurance during the pendency of the divorce?

There is generally a restraining order providing that insurance should be maintained during the divorce action, although there are exceptions to this practice which are generally addressed in the temporary hearing.  It is generally a good idea to make sure the new insurance is in place before canceling any policy, even when a spouse may have to double up on monthly payment.  The risk is just not worth it.

                                                                  MAINTENANCE

What is maintenance?

Maintenance is financial support paid to an ex-spouse after a divorce. 

Will one spouse have to pay maintenance to the other spouse?

Wisconsin courts have broad discretion to determine when maintenance is appropriate.  Unlike child support, the court does not have percentage guidelines to use when determining maintenance payments.  Instead, the courts are guided by the following ten considerations:

1)      The length of the marriage;

2)     The age and physical and emotional health of the parties;

3)     The division of property made under s. 767.61;

4)     The educational level of each party at the time of the marriage and at the time the action is commenced;

5)     The earning capacity of the party seeking maintenance, including educational background, training, employment skills, work experience, length of absence from the job market, custodial responsibilities for children and the time and expense necessary to acquire sufficient education or training to enable the party to find appropriate employment;

6)     The feasibility that the party seeking maintenance can become self‑supporting at a standard of living reasonably comparable to that enjoyed during the marriage, and, if so, the length of time necessary to achieve this goal;

7)     The tax consequences to each party;

8)     Any mutual agreement made by the parties before or during the marriage, according to the terms of which one party has made financial or service contributions to the other with the expectation of reciprocation or other compensation in the future, where such repayment has not been made, or any mutual agreement made by the parties before or during the marriage concerning any arrangement for the financial support of the parties;

9)     The contribution by one party to the education, training or increased earning power of the other; and

10)    Such other factors as the court may in each individual case determine to be relevant.

No single factor is dispositive and the courts must weigh all factors giving appropriate weight to each.

How long will one spouse have to pay maintenance?

The court uses the same factors listed above to determine the proper length of the maintenance award.  Under most circumstances, maintenance terminates when one spouse dies or the spouse receiving maintenance remarries.

What types of maintenance awards may the court order?

One type of maintenance award is long term maintenance.  Typically, when the parties have been married for a long time, the courts are more willing to give the other spouse long term maintenance.  Courts will often begin its evaluation of maintenance by dividing the parties' total earnings on a 50/50 basis.

Another type of maintenance award is short term or temporary maintenance.  The court may order this type of maintenance to permit a spouse to become self-supporting within a few years.

What is non-modifiable maintenance?

Non-modifiable maintenance is paid for exactly as long as is stated no less, no more.

What if one spouse does not want to pay maintenance to the other spouse for the next 5 years, but that spouse is willing to just give a lump sum payment right now.  Can that be done?

Yes.  A spouse can buy-out maintenance.  This buy-out may be part of the property settlement that would increase the property received by the spouse seeking maintenance.  Before offering a buy-out of maintenance, a spouse must consider two important factors: 1) the present value of the asset and 2) the tax consequences.

The value of a dollar today is worth more than a dollar tomorrow.  This is because the holder of the dollar possesses the ability to place that dollar in an account that can gain interest.  As a result, a buy-out of maintenance will always be less than the total value of the maintenance paid over the long term.

A spouse must also consider certain tax consequences of a buy-out. For example, if the buy-out of maintenance is included as part of the property division, the payer of maintenance can no longer deduct the payments on his/her taxes.  Likewise, the person receiving maintenance would not be required to claim the award as income for tax purposes.

Who typically pays the taxes on maintenance?

Normally, the person who receives maintenance pays taxes on it as ordinary income.  The person who pays maintenance gets to deduct that amount from his/her taxable income.

How does the ex-spouse protect maintenance in the event of the paying spouse' s death?

The martial settlement agreement may contain provisions for life insurance to cover the life of the person paying maintenance.

What if an ex-spouse is awarded maintenance for 6 years, and then gets remarried in 2 years?

Maintenance usually terminates on remarriage.

Under what circumstances will a court change the maintenance award that one spouse must pay?

A court may change maintenance only on a showing of a substantial change in circumstances.  An example may be if one spouse got cancer and was unable to maintain a job.  A court may determine that since the spouse is unable to work, requiring that spouse to pay maintenance would be unreasonable.  Other examples would be if the spouse receiving maintenance had a higher paying job or won the lottery.

                                                          PROPERTY DIVISION

How will assets be divided?

Wisconsin is referred to as an "equitable distribution" state.  Typically, the parties reach an agreement as to how assets should be divided.  If the parties are unable to reach a settlement, the court will distribute the marital assets between the two parties in an equitable fashion.  Equitable does not necessarily mean equal, but rather what is deemed fair and reasonable by the court. 

The presumption in Wisconsin, however, is that all property and/or debts of the parties will be divided equally. The court can alter the presumption of equal distribution to both parties based on the following factors:

1)      The length of the marriage;

2)     The property brought to the marriage by each party;

3)     Whether one of the parties has substantial assets not subject to division by the court;

4)     The contribution of each party to the marriage, giving appropriate economic value to each party's contribution in homemaking and child care services;

5)     The age and physical and emotional health of the parties;

6)     The contribution by one party to the education, training or increased earning power of the other;

7)     The earning capacity of each party;

8)     The desirability of awarding the family home or the right to live therein for a reasonable period to the party having physical placement for the greater period of time;

9)     Maintenance and/or family support orders;

10)    Other economic circumstances;

11)     The tax consequences to each party; and

12)    Other relevant factors.

What if one spouse has title to all of the property in his/her name?  Is the other party still entitled to the presumption of equal division?

Yes.  Because Wisconsin is a marital property state, each spouse is entitled to a one-half interest in all property acquired by either spouse during the term of the marriage.  Therefore, who actually holds title to property is essentially irrelevant in Wisconsin, except if the property is gifted or inherited; in that event, title to the property may be significant.

What is the difference between marital and individual property?

Generally, gifted and inherited property is considered individual property held by the spouse who received the property.  All other property acquired during the marriage is typically considered marital property.  Whether a spouse will be able to receive any of the gifted or inherited property on divorce depends on what the parties did with the property when it was received.  Generally, if the inherited or gifted property is kept separate from the marital property, it will remain separate property and the other spouse will not receive any of that property.  However, if the individual property is commingled with the marital property, the other spouse may receive a portion of the inherited or gifted property. 

What is an example of individual property that a spouse could inherit during the marriage?

Assume one spouse's father died and left that spouse $10,000.  If this money is put into an account in that spouse's name only, it can generally be kept as individual property.

What is an example of individual property that a spouse could receive during the  marriage as a gift?

Assume that one spouse's mother gave that spouse a gift of $10,000 and the check was made out to that spouse only and not to both spouses.  The check was deposited in a savings account with only the receiving spouse's name on the account.  This gift would be considered individual property.

If one spouse put $1,500 in a savings account in his/her name only during the marriage, is that considered marital property?

If the funds in the savings account are gifted or inherited by that spouse, the money is that spouse's individual property.  If the money comes from another source such as that spouse's salary, the funds are marital.

What if one spouse brings a house into the marriage that is in that spouse' s name only, but the other spouse' s name is added too the Deed?

Once the other spouse's name is added to the deed as an owner of the property, the court presumes that the property is marital.  However, the court may take into consideration property brought into the marriage as a factor in property division.

What if one spouse accumulated some of his/her 401(k) account prior to marriage? Is that spouse entitled to the premarital portion of that money?

Typically, the premarital portion of a retirement account is not included as part of property division at the time of the divorce.  The court, however, has the power to divide the account as it sees fit based on the facts and circumstances of each case and the factors cited above.

How are household goods valued?

The value is the Fair Market Value.  In other words, what someone will pay for it at a private party sale or a garage sale.  If the parties cannot agree on the value of the property, it will have to be appraised.

What if the parties cannot agree on the value of their house?

If the spouses cannot agree on the value of the residence, it will have to be appraised.

Will a selling commission be subtracted from the value?

Maybe.  A court will only consider a selling commission when dividing marital property if the house is to be sold immediately following the divorce.  See Ondrasek v. Ondrasek, 126 Wis. 2d 469, 480-481 (Ct. App. 1985).

Will capital gains taxes be subtracted from the value of the house?

Maybe.  A court will only consider capital gain taxes when dividing marital property if the house is to be sold immediately following the divorce.  See Ondrasek v. Ondrasek, 126 Wis. 2d 469, 480-481 (Ct. App. 1985).  A court is not obliged to consider the tax consequences of a hypothetical or theoretical disposition of marital property.   Id. at 480.

What are capital gains?

When spouses sell their jointly owned residence, they may take a $500,000 exclusion from any capital gain.  Capital gain is the profit resulting from the sale of capital investments, such as stocks and real estate.  It has nothing to do with the mortgage on the property.  A single person can take a $250,000 exclusion.

For example: If one party receives the marital house through property division and the house has a mortgage with a principal balance of $35,000, if the party decides to sell the house for $420,000 after the divorce, the taxable gain would be $135,000 ($420,000 - 35,000 = $385,000 - $250,000 = $135,000).  Without proper tax planning, the party could end up owing $20,250 in federal taxes. 

What if a spouse suspects the other spouse, who runs a business, is hiding information?

Start making copies of all the financial information as soon as possible.  This information would include the following:

1)      Bank statements;

2)     Canceled checks and checkbooks;

3)     Savings account passbooks;

4)     Income tax returns (both personal and business);

5)     Estate and gift tax returns;

6)     Financial reports;

7)     Applications for loans; and

8)     Income and Balance Sheets for the business.

                                                            RETIREMENT BENEFITS

Are pension plans and retirement plans marital assets?

Yes.

What does vesting mean?

Vesting means that at least some of the pension belongs to the individual and not the employer.  Practically speaking, it is what the person would get if he/she left the company.  This share of the pension comes from two sources.

1)      Employee contributions are 100% vested immediately.  When an employee leaves a company, whether by his choice or not, he can take 100% of his contributions plus any earnings on those contributions.

2)     Employer contributions can be anywhere between 0-100% vested. Assume the employer has contributed $3,000 to the employee's account and it has earned $500 in interest.  Assume the employee is 10% vested and then decides to leave the company or is fired.  The employee can take 10% of the $3,500 total value of the account or $350.

What if one spouse's  pension plan says that spouse will receive $1,200.00 per month when he/she retires but does not provide a current value of the pension plan?

This is a defined benefit plan.

What is a defined benefit plan?

A defined benefit plan is an account to which the employer contributes in various amounts to guarantee that the employee receives a certain amount at retirement time.

What if the spouse dies soon after retirement?

Survivor benefits can be set up before retirement even for an ex-spouse.  If survivor benefits are chosen, the monthly payout is usually a smaller amount because the account will now pay out for two lives.

What is a QDRO?

QDRO stands for Qualified Domestic Relations Order.  It is used to divide certain retirement accounts in a divorce.  A spouse can be awarded anywhere from 0-100% of a retirement account by a QDRO.  The most common amount is 50%.

John is 52 years old. His 401K plan has $320,000 cash in it.  A 50% portion, according to a QDRO ($160,000), will be awarded to Mary, age 50.  The other $160,000 will remain in John' s account.  If Mary takes the $160,000 cash, will she have to pay the 10% penalty because she spent it before age 59 1/ 2 ?

No.  Because Mary is using a QDRO to divide the retirement account, she can receive the $160,000 cash without paying a 10% penalty.  However, unless Mary puts the $160,000 into her own IRA within 60 days, she will have to pay taxes on the cash. 

If one spouse has never worked, will he/she get Social Security?

If one spouse works and the parties have been married for 10 years or more, then the non-working spouse is entitled to one-half of the working spouse's Social Security or his/her own, whichever is higher.

If one spouse worked for 5 years and has a very small amount in his/her Social Security account, how much Social Security will he/she receive at retirement?

If the spouses were married for 10 years or more, he/she would be entitled to half of the other spouses Social Security or his/hers, whichever is higher. The spouse may make this choice at the time that he/she applies for Social Security. 

If a spouse gets remarried, will the ex-spouse still be eligible for half of the marrying spouse' s Social Security?

Even if one spouse gets remarried, if the spouses were married for 10 years, the ex-spouse will be entitled to half of the marrying spouse's Social Security.

Will that reduce marrying spouse' s Social Security?

No. It will not.  Assume that the spouse is entitled at age 65 to receive $750 per month in Social Security.  That spouse will still be able to get $750 per month.  The ex-spouse will be able to received $375 per month.

If the ex-spouse has been remarried for more than 10 years, will he/she still be able to receive half of the other spouse' s Social Security?

The ex-spouse now has a new spouse and is no longer entitled to the former spouse's benefits.  The exception to this is that if he/she is married to his/her second spouse 10 years or longer and then gets divorced, he/she will be able to received half of his/her Social Security on retirement or half of the former spouse's or his/her own account, whichever is higher.  He/She has that choice at the time of retirement.

What happens to the non-working ex-spouse (when the parties were previously married for 10 years or more) if, after the divorce, the other spouse dies before turning age 65?

If the non-working spouse has not remarried by age 60, he/she will get the other spouse's full Social Security benefits.

DEBTS/FINANCIAL OBLIGATIONS

Is one spouse responsible for the other spouse s credit card debt, which he/she incurred during the married, even though it was solely in his/her name?

Generally, all debts incurred while a couple is married are the responsibility of both parties. 

There are essentially two forms of debt: marital and personal.  With marital debt, each party is responsible for 2 of the debt.  Examples are medical bills or credit card debt incurred while the parties were still married.  With personal debt, the party that incurred the cost is solely responsible for the debt.  An example of personal debt could be expenses placed on one party's credit card after the date of filing for divorce. 

Will an agreement which is part of a marital settlement agreement relieve one party from payment of debts incurred during the marriage?

No. A marital settlement agreement is only a contract between spouses.  It cannot bind third parties (such as banks or finance companies) that have not signed it.  If, however, one spouse promises to pay a bill and then breaks that promise, resulting in the other spouse having to pay, the injured spouse can sue the non-paying spouse for breach of contract.

What is the effect of bankruptcy on an obligation to pay a property settlement?

The law states that a property settlement is not a dismissible debt in a bankruptcy unless provision is made to the contrary.

What if an ex-spouse files for bankruptcy after the divorce is finalized.  Is the other party responsible for debts that he/she was allocated by the divorce?

If an ex-spouse files for bankruptcy, the other spouse generally will be responsible for the entire amount of any debt/liability that the ex-spouse was allocated to pay in the divorce and is discharged from through his/her bankruptcy.  Usually, this rule only applies to joint debts.  If a debt is in one party's name alone, the creditor typically does not attempt to seek repayment from the non-listed spouse.  If the creditor does seek repayment from the non-listed spouse, that spouse would be responsible for the debt.

In response to being forced to pay an ex-spouse's debts/liabilities, the other spouse could file a contempt motion with the trial court.  One possible remedy the court may provide is a wage assignment to the injured spouse for any amounts the ex-spouse failed to pay and was his/her responsibility.

If a party files for bankruptcy after divorce, will said party still have to pay child support and maintenance?

Yes. Although bankruptcy can complicate matters, the law says that child support and maintenance are not dischargeable debts in bankruptcy.

TAXES

How does marital status affect how a spouse may file tax returns?

It is critical.  If the spouses are considered married, a spouse may file as married filing a joint return or married filing a separate return, or head of household.  If a spouse is  considered unmarried, the spouse's status will be single or possibly head of household.

How does a spouse determine if he/she is considered unmarried?

The spouse's marital status is determined on the last day of tax year, or December 31 for most individuals.  In general, a spouse is considered unmarried@ for the whole year if either of the following applies:

1)      A final decree of divorce or separate maintenance by the last day of the tax year has been obtained; or

2)     A degree of annulment which holds that no valid marriage ever existed has been obtained.

When may a married person living apart from a spouse file as head of household?

Generally when the following conditions are met:

1)      Taxpayer maintains a household for his/her dependent children;

2)     The household is the taxpayer's home and the main home of the dependent children for more than half the year;

3)     The taxpayer provides more than 50% of the cost of maintaining the household;

4)     The taxpayer's spouse was not a member of the household during the last six months of the year; and