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Milwaukee Family And Elder Law Attorneys

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How are Assets Divided during Divorce?

by | Aug 30, 2021 | Complex Family Law, Family Law |

One of the most common questions about divorce is how to divide assets. Under Wisconsin law, the presumption is that all marital property is to be divided equally between the spouses, but the court may consider a variety of factors and deviate from this presumption. If a spouse receives assets by gift from someone other than his or her spouse or by inheritance, then this gifted or inherited property may not be subject to property division.

A few of the factors to consider when deciding whether it is appropriate to have an unequal division of marital property include some of the following:

Length of the marriage. In a short-term marriage (i.e., 2-4 years), the goal will likely be to restore the parties to their respective financial positions before the marriage. If there were significant changes to the assets or debts during the marriage, it is possible to have the difference split between the parties or allocated depending on contributions. In a long-term marriage (i.e., 25 years), it is more likely to expect an equal division of assets and debts, but we must also consider the remaining factors.

The property brought to the marriage by each party. It is not uncommon for one spouse to enter the marriage with modest assets and student loan debt if he or she recently completed graduate school and the other spouse to have more assets and lower debt if he or she has been in the work force for longer. The situation of each spouse upon entering the marriage will be reviewed to properly understand what is fair for property division. However, courts do not automatically restore parties’ pre-marital assets or debts.

Whether one of the parties has substantial assets not subject to division by the court. If one spouse has inherited or gifted assets, the size of these assets may be taken into account when it is time to divide the marital assets and debts. While the inherited or gifted assets themselves may not be divided, the ability for one spouse to live comfortably on an inheritance from a parent may reduce the need for that spouse to receive an equal share of the marital property division depending on the other factors.

The contribution of each party to the marriage, giving appropriate economic value to each party’s contribution in homemaking and child care services. In some cases, one spouse may support the other and the household while the other spouse is attending school or working during the marriage. We even see these roles sometimes switch during the marriage depending on changes in the goals and careers of the spouses. Therefore, it is important to consider what each spouse contributes to the marriage, both economic and non-economically.

The age and physical and emotional health of the parties. When considering this factor, the court is evaluating the ages and health of the spouses to determine if they should receive a greater share of the marital assets. For example, if one spouse is 45 years old and the other spouse is 60 years old, the 60-year-old spouse may be considering retirement in a few years and have different needs than the spouse who is 45 years old.

The contribution by one party to the education, training or increased earning power of the other. Often, we see this factor overlap with the contributions of each party to the marriage. This factor specifically is about whether one spouse helps the other spouse increase earning potential by assisting the spouse’s pursuit of additional education or training. For example, if you were the higher wage earner for many years during your marriage while your spouse was attending medical school, you not only contributed to your marriage by providing support for your spouse and your family, but also helped your spouse increase his or her future earnings. Furthermore, if you provided support and care for your family and household while your spouse was increasing his or her earning power, then this support is taken into consideration.

The earning capacity of each party, 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 become self-supporting at a standard of living reasonably comparable to that enjoyed during the marriage. The court wants each party to leave the marriage with the necessary skills and assets to be self-supporting. Therefore, there is an analysis of this factor when dividing assets and may affect support also.

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. If one spouse can maintain the expenses of the marital home post-divorce and that spouse will have more placement time with the minor children, then the court may be more inclined to have that spouse keep the family home when dividing the assets, if affordable.

Any written agreement made by the parties before or during the marriage concerning any arrangement for property distribution. If the parties have a Prenuptial or Post-Nuptial Agreement, the court will consider whether the Agreement should be enforced based upon a number of factors.

Such other factors as the court may in each individual case determine to be relevant. This catch-all factor allows the parties or their attorneys to make arguments about anything that may be relevant to dividing the assets unequally.

We recommend consulting an attorney to guide you through the divorce process. The division of assets and debts can be difficult for most clients to navigate on their own, especially depending on the complexity and uniqueness of the assets. It is important that you understand your rights under the law and receive a fair and reasonable property division to be self-supporting post-divorce.