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.

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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.

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.

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

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.