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How Property is Divided in a Wisconsin Divorce

Wisconsin is a "community property" state, which means any property that has been acquired (by either party) prior to or during the course of the marriage is considered marital property, even if it is not titled in both names. Regardless of which spouse is the titled owner of the marital home, each spouse has a one-half interest in the home and has the same right to use and reside in the home. This right can be varied by court order or contract.

When dividing your property and debt, the court begins with a presumption to equally divide all assets, debts, and liabilities. Property includes real estate, vehicles, retirement accounts and pensions, personal belongings, debt, bank accounts, recreational toys, animals, etc.

Does ALL property get divided?

While the law presumes all property is communal property, the parties often negotiate the division of the assets acquired during the marriage and exclude their premarital assets as their individual property. However, an argument can be made that the premarital interests are so commingled with marital assets that they have lost their individual interest and have become all marital. Such an argument requires a careful review of the facts and the help of an experienced attorney.

50/50 Property Division in WI

In addition to being the largest assets, family homes, vacation homes, and other properties often hold precious family memories. In Wisconsin, there is a presumption that the value of real estate properties will be divided 50.50 in a divorce. Exceptions may occur if the property was given as a gift or inherited.

How do bank accounts get divided?

Wisconsin is a community property state, meaning the court begins all divorce proceedings with the baseline presumption that a 50/50 split of all marital property is fair and equitable. All bank accounts of either party, whether they are jointly held or only in one spouse’s name, are considered marital property. If you believe you should be entitled to more than 50% of marital property, it will be up to you and your attorney to prove it to the court.

Certain assets, such as ones acquired through gifts or inheritance, are not subject to 50/50 division. However, to maintain the individual nature of the asset the receiving spouse must not have comingled those things with marital property by adding gifted or inherited assets into a joint checking or savings account.

Negotiating Division of Accounts Before Divorce

It is often beneficial to discuss and negotiate how your property will be divided with your spouse. Negotiating with your spouse and respective attorneys allows you to decide how marital property will be divided, rather than forcing the court to make the decision. A 50/50 split may not be the best option for you or your spouse, and making the decisions between yourselves is often the best way to achieve favorable outcomes for everybody involved. An attorney from Divergent Family Law will be able to guide you through negotiations to help secure ideal resolutions for your divorce case and your bank accounts.

Inheritance and Divorce in Wisconsin

Wisconsin is a community property state, meaning that the assets and debts of each spouse belong to both spouses (with some exceptions). During a divorce or legal separation, the parties work toward a property division agreement. Wisconsin law begins with the presumption that the property division will be split equally, 50/50.

Property Division and Inheritance: How It Works

There are certain exceptions to the law’s presumption of an equal property division – including for inherited property. Wisconsin law defines inherited property as property that comes to the party as the result of the death of another person (including cash and investments). Wisconsin law further states that inherited property “shall remain the property of that party and is not subject to a property division” during a divorce.

However, the law contains exceptions to this general rule. A court may find that inherited property should be divided between the spouses if not dividing the property will create a hardship on the other spouse or children.

Inherited Property Used as Down Payment for House

One of the things that an inheritance can do is offer people the chance for home ownership. Many people use a portion of their inheritance towards the downpayment on a marital home. A home is a great investment, but know that using inherited funds as a downpayment will result in that portion being considered marital property. 

What Should I Do To Make Sure My Inheritance Stays Mine?

In the event of a divorce, the parties, attorneys and courts will be looking at whether inherited property has been mixed with marital property. If so, it has more than likely become marital property.

So keep it separate! Your inheritance should remain in separate cash or investment accounts, or kept for your personal enjoyment and use, rather than the enjoyment and use of the marriage.

Even if you do your best to keep things separate, there are still ways that portions of inherited property can become marital. For example, the growth of inherited investment accounts may under some circumstances be marital.

Who Gets the House in a Wisconsin Divorce? 

One of the biggest questions people have when they are going through a divorce is, “Who gets the house?” The answer is different for everyone, so it’s critical to understand how property division works in Wisconsin. 

There are 4 main avenues you can take when deciding what to do with your Southeast Wisconsin home during your divorce. 

What Wisconsin’s Status as a Community Property State Means for Your Home

Wisconsin law presumes parties getting a divorce should divide all of their property equally. This can include cars, bank accounts, retirement savings, debt, and finally, the house. While there are exceptions to this standard, they need to be reviewed on a case-by-case basis, and it’s up to the party requesting the deviation from the 50/50 split to prove their proposal for the split is equitable.

Deciding What to Do With Your Home in a Divorce

The 3 most common options for dealing with a home in a Wisconsin divorce include: 

  • Negotiate a buyout with your ex-spouse in one of two common ways: 
    • Offer your ex-spouse assets from other areas of the marital estate. For example, you can offer them a higher percentage of funds from your retirement account or offer a cash payment from a banking account in exchange for the house.
    • Refinance the home in your name and offer your ex-spouse a cash payout from the new mortgage. 
  • Sell your home and split the equity
    • Some couples prefer this option, as it offers straightforward solutions and affords each party a chance to move on and leave memories behind.
  • Give your home to your ex-spouse to reduce or eliminate alimony payments.

Many couples choose to sell their home and split the equity equally, which is often the simplest option. Depending on your unique situation, you and your ex-spouse may choose a different path to better suit your needs. 

Don't Maintain Shared Ownership of Your Home

Continuing to co-own your home with your ex-spouse is an alternative to property division. However, we do not recommend maintaining ties in this regard. Continuing to co-own your home with your ex-spouse comes with a slew of complications including: 

  • Tax implications
  • Maintenance costs
  • Disagreements about renovations
  • A large burden on your credit
  • Responsibility for payments and property despite your ex-spouse’s financial choices
  • Ownership issues upon one of your deaths

The seasoned Milwaukee divorce lawyers at Divergent Family Law are here to help you come out of your divorce with a fresh start and in the best financial situation possible. 

Selling Your Home During a Divorce

If you wish to sell the home, review the current real estate market to determine if it’s best to sell your home now or wait to sell your home in a more desirable market. Work with a real estate agent to learn what steps you need to take to make your home ready for showing and sale and to get an idea of what asking price you should set for your home. Remember, all debts associated with your home will need to be paid off in the sale, including the mortgage and home equity lines of credit. 

Consider discussing your home with a financial advisor to learn what taxes and capital gains may be associated with the sale of your home. 

If an Agreement Can’t Be Made, Trial is the Next Step

If you and your ex-spouse are unable to come to an agreement on what to do with your home on your own or with mediation, you will need to go to trial, where the court will make a decision based on Wisconsin law and the specific facts of your case. Relevant information may include:

  • Whether the home was a gift or inheritance to one of the parties
  • Whether there are marital children who primarily reside with one parent
  • Whether maintenance payments are owed to one party by the other
  • Whether one party has committed marital waste
  • Whether specific financial circumstances of the parties
  • Other factors


We Have a Mortgage - What Should I do?

Sell the Home. This option requires cooperation. Several shared decisions must be made including the selling price, timing of the sale, cost of cleaning, staging, and more. Some parties use their portion of the money from selling a home to start fresh and buy a new home.

Remove a Party From the Mortgage. How removal is completed depends on individual situations.

Explore Loan Assumption

After a divorce settlement, loan assumption removes one spouse from an existing mortgage. The other spouse assumes full responsibility for the existing loan. Your lender stipulates the terms, including refinancing costs or interest rates.

Why get a loan assumption?

Who qualifies for a loan assumption?

Refinance. One spouse takes out a new loan to pay off the original mortgage loan and buys out the other spouse's equity. Refinancing approval looks at credit and income history.

Pros of Refinancing Cons of Refinancing
Privacy and Protection for both parties
  • If you refinance to put the mortgage loan in your name, you will have all the privacy and privileges pertaining to your home
  • If your spouse refinances without you, you will not be held responsible if your spouse defaults on the loan
Closing cost, rates, and loan terms
  • When you refinance, you essentially re-purchase your home. With this, you may expect to pay between 2-6% of the home loan amount during close.
  • Payment may increase if current interest rates or loan terms are high
Stay in your home to your financial advantage
  • Buying your spouse out of home equity can result in a large sum of money for you
  • Potential for better terms and lower rates during refinancing
Potentially difficult to qualify
  • The lender will look at your independent income, credit history, debt-to-asset ratio, and other financial information to decide if you qualify.
Pros of Refinancing
Privacy and Protection for both parties
  • If you refinance to put the mortgage loan in your name, you will have all the privacy and privileges pertaining to your home
  • If your spouse refinances without you, you will not be held responsible if your spouse defaults on the loan
Stay in your home to your financial advantage
  • Buying your spouse out of home equity can result in a large sum of money for you
  • Potential for better terms and lower rates during refinancing
Cons of Refinancing
Closing cost, rates, and loan terms
  • When you refinance, you essentially re-purchase your home. With this, you may expect to pay between 2-6% of the home loan amount during close.
  • Payment may increase if current interest rates or loan terms are high
Potentially difficult to qualify
  • The lender will look at your independent income, credit history, debt-to-asset ratio, and other financial information to decide if you qualify.

Alternative to Refinancing and Loan Assumption

Keep the home as an income or rental property. Both parties remain on the mortgage.

Home Equity Line of Credit (HELOC) may allow you to borrow against the equity for cases where a lump sum is owed.

Property Rights of Married Persons in Wisconsin

The Wisconsin Marital Property Act of 1986 promotes the policy of supporting the marital relationship as an equal partnership and establishes Wisconsin as a community property state. Regardless of who makes a higher income or how household labor is divided, Wisconsin spouses share equally in the fruits of the marriage. Pursuant to this policy and subject to a few exceptions, Wisconsin law presumes all property either spouse acquires during the marriage to be marital property.

What is Marital Property?

Marital property includes income, possessions, or debt in which spouses share an equal interest. Property in a marriage is considered individual property if only one spouse owns an interest in it. Some ways property becomes characterized as marital property include:

  1. One or both spouses acquire the property after the “determination date.”
  2. One spouse’s individual property is mixed with marital property without any record to prove it is individual property.
  3. The spouses reclassify the property as marital property in a marital property agreement.

The Determination Date

Wisconsin designates the day from which all property spouses acquire will be presumed to be marital property as the Determination Date. The statute specifies that the “determination date” is whichever of the following was the last to occur:

  1. The date of the marriage;
  2. The date both spouses became residents of Wisconsin; or
  3. January 1, 1986.

If the date of marriage is earlier than the determination date, the property owned before that date is not subject to the Marital Property Act presumption. For example, if a married couple moves to Wisconsin, the property each spouse acquired before becoming a resident of Wisconsin does not automatically become marital property.

Can a married person own individual property?

Yes, married people can own individual property so long as the property remains separate. Typical examples of individual property include gifted property, inherited property, and property acquired by a spouse prior to the determination date. However, a spouse’s individual property will lose its individual status if it is mixed with marital property. For instance, depositing inherited money into a joint bank account likely transmutes the property because it complicates tracing those funds and demonstrates an intent to share the money with the other spouse.

Management and Control of Marital Property

It is also important to note that merely having one spouse’s name on the property title does not classify the item as individual property. Instead, holding property under one spouse’s name only grants the named spouse the ability to act alone in managing and controlling the property. The right to manage and control marital property does not determine the classification.

Either spouse has the right to manage and control an item of property that is not held in either spouse’s name. When property is held in the name of both spouses, the couple may manage and control the marital property only if they act together.

What is a Marital Property Agreement?

If you and your spouse wish to avoid Wisconsin community property law, it would be a wise decision to hire attorneys to draft and enter into a Marital Property Agreement before or during your marriage. A marital property agreement is what the state of Wisconsin calls a prenuptial or post-nuptial agreement. Among other things, the agreement allows you and your spouse to choose how to classify certain property and/or assign certain debts. In the event of a divorce, a valid marital property agreement would dictate the division of your marital property, rather than Wisconsin law.

Can you be held responsible for your spouse’s debts?

Yes, any debts you or your spouse incurred during the marriage are presumed to be in the interest of your marriage. Therefore, a creditor may go after both the debtor’s individual property and all marital property.


Factors Influencing Property Division

Wisconsin Statute Section 767.61(3) provides factors for the courts to consider when a property is not being equally divided:

  • The length of the marriage
  • The property brought to the marriage by each party
  • Whether one of the parties has substantial assets not subject to division by the court
  • The contribution of each party to the marriage (i.e. amount of the party's income spent on bills, groceries, childcare services, etc.)
  • The age and physical/emotional health of the parties
  • The contribution by one party to the education, training, or increased earning power of the other
  • The earning capacity of each party
  • The amount and duration of maintenance payments to either party
  • Other economic circumstances of each party
  • The tax consequences to each party
  • Any prenuptial agreement made by the parties before or during the marriage
  • math of a divorce. You should consider what is best for you financially with the primary goal of securing long-term stability.

Exempted Property from Division

Property may be considered individual property of a party and not subject to division if it was:

  • Gifted from someone other than your spouse
  • Acquired via your family inheritance

Ultimately, the court may need to decide if the property is to be excluded from division in the marital estate based on when the asset was gifted or inherited. Excluded property is deemed individual property.

Who is responsible for debt after a divorce?

Temporary Hearings

In the early stages of a divorce case, either party can petition the court for a temporary hearing. A temporary hearing allows the Commissioner or Judge to make a temporary decision on which party will pay which debts in order to preserve the family’s financial stability while the divorce is pending.

During the temporary hearing, a party can ask for family support, (also called child support if there are children, and/ or spousal maintenance). A party can also make requests for the other party to pay or contribute to the mortgage or rent, utilities and other expenses. The court’s decision on expenses will be based on each party’s individual circumstances.

Hiring an experienced lawyer from the start of your case is very important. Contact Divergent Family Law for advisement as soon as possible if you are going through a divorce.

Division of debt & property

After the temporary hearing, it will be up to the parties or their attorneys to negotiate how assets and debts will be divided after the divorce is finalized.

Wisconsin is a community property state, meaning all assets and debts a person owns, whether they were acquired before or during the marriage, are considered marital property. There are certain exceptions to community property laws for assets acquired through gifts, inheritance or assets specifically labeled in a prenuptial agreement.

Your attorney will take all these factors into account while negotiating the division of debt in your case.

There are multiple forms of debt able to be dispersed during your divorce negotiations.

  • Unsecured debt:

    Unsecured debt is often in the form of credit card debt or personal loans. To allocate unsecured debt during a divorce, attorneys and the court will take into account factors like who originally incurred the debt, whose name is on the account, when the account was opened and who has been making payments.

  • Mortgage Debt:

    Mortgage debt will likely be assigned to the party keeping the marital home. The spouse staying in the home will often have to “buy” the other party out, in that the party will have to give the other spouse ½ the equity of the home. The party staying in the home will then be responsible for paying the remaining balance of the mortgage.

  • Auto loan debt:

    Auto loan debt for particular vehicles is most often assigned to the party keeping the vehicle. If the vehicle is in the other party’s name, the person keeping the vehicle will have to refinance the vehicle into a loan in their own name.

  • Student loan debt:

    Student loan debt is most often assigned to the party whose education was paid for using the loan. It is possible for the court or attorneys to assign the debt to the other party, but this situation usually involves other extenuating circumstances.

  • Medical debt:

    The division of medical debt can become complicated. The court will usually treat it as joint debt if both parties are relatively healthy. If the medical debt is a result of an elective procedure, it may be assigned to the person who benefited from the procedure. If the medical debt is for the children of the parties, it will be distributed equally.

  • Debt incurred while the divorce case is pending:

    The court will usually award each party to individually pay any debts they incurred during the timeframe of the divorce proceedings.

  • It is important to hire an advocate to fight for your best interests during debt negotiations in your divorce proceedings. Contact Divergent Family Law today to learn your best steps forward.

4 Tips for Dealing with Finances Post-Divorce

Your divorce is finalized, and you can finally start to move forward with your life. Hopefully, you have well-laid-out financial terms, but now it’s time to adjust to your new situation.

  • Assess your new financial situation

    The first thing to do is to review the new finances and expenses you have after the divorce has been finalized. You should make a detailed list and divide the finances and expenses into categories.

    Next, consider which of those expenses you expect to be long-term expenses. For example, if you downsize from the family home, chances are the monthly expenses for housing will be lower than they have been. Conversely, you may now have additional income from support or maintenance to help with monthly expenses. The main goal is to be as realistic as possible to build an optimal starting point for your new financial situation.

  • Budget for maintenance payments 

    If the court orders you to pay maintenance, you will need to create a new portion of your budget to include those payments. Keep in mind there may be tax implications from maintenance payments, so make sure to consult a tax expert to distribute your budget properly.

    Maintenance payments may change over time, depending on how they are precisely laid out in the terms of your divorce. It’s important to build a budget to work with the addition of the full maintenance payments, then modifications to the payments can act as a bonus.

    Keep in mind if you have a substantial reduction in income, you can request the court modify the maintenance. If you need modifications to maintenance payments, you should act as quickly as possible after a significant reduction in your income. The most important thing is to avoid getting behind on payments because it could negatively impact your financial stability.

  • Time to focus on your career

    You can finally put the stress of the divorce behind you, and now’s the time to focus on your career. Putting your energy into your work will help you excel and almost certainly benefit you financially. With added time you can work toward promotions or even go back to school to elevate your earning potential.

    Securing a stable income seems simple, but it is the best first step to moving your life forward. It will help boost your ability to have an overall better quality of life.

  • Downsize your home 

    After a divorce, people often have one or two perspectives on their marital home. Either they find it difficult to leave the memories from the family home, or they may want to put the past behind them and start fresh. Either way, moving out of the family home and downsizing to a smaller home or apartment can have significant financial benefits.

    Your budget may be tight in the immediate after

Legal Separation FAQ's

If I started a business during the marriage, will it be divided too?

Is my retirement fund still mine?

Does retirement account interest get split in a divorce?

Do I need to disclose all my assets to my spouse?

Who keeps the pets in a divorce?

Who keeps the rings in a Wisconsin divorce?

How is debt divided under Wisconsin divorce law?

Am I responsible for my ex's student loans?

Does spousal abondonment affect property division?




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