Marital Property Agreements
Wisconsin enacted the Wisconsin Uniform Marital Property Act on January 1, 1986. This law presumes that all property acquired during a marriage belongs to each spouse equally because each spouse makes equal contributions to the development and growth of the marriage.
Marital Property Agreements may also be used to reduce capital gains tax exposure. But the law allows you to set your own rules for property ownership. For example, you may wish to make it clear that a certain asset belongs only to one spouse such as an inherited cottage. A Marital Property Agreement may classify property as individual or marital, and may also be used to take advantage of Wisconsin laws allowing residents to avoid the excess time and added cost of the probate process.
A Prenuptial Agreement is a contract between two people prior to marriage that identifies each person’s assets and specifies the terms on how those assets will be owned during the marriage and divided and distributed in the event of divorce or death. A Prenuptial Agreement can also include suggestions regarding the amount of alimony, or maintenance, to be awarded or paid by each spouse in the event of a divorce.
A couple with children from prior marriages may use a Prenuptial Agreement to indicate what will happen to their individual property at death so they can pass property on to their children and provide for the surviving spouse. Without a Prenuptial Agreement, the surviving spouse may have the right to claim most of the other spouse’s property, leaving much less for the children.
Once I am married, does all my property become marital property?
No. Property that you owned prior to marriage may remain individual property as long as you continue to keep it separate from marital property and have the documentation to prove that it belongs solely to you. Also, any gift or inheritance, whether received prior to marriage or after, may also be considered individual property if certain continuing obligations are met.
The house is in my name, but I have been paying taxes and other expenses out of our joint checking account. My spouse claims this is now marital property, is that correct?
Yes. When individual property is commingled with marital property, the law presumes the property to be marital. In this instance, since the taxes and other expenses have been paid from a joint checking account, the house may be considered marital property because both spouses are contributing to the upkeep and maintenance of the house. In order for an asset to remain individual property, documentation must prove that all taxes, maintenance and upkeep have been provided by that one person’s individual property.
We disagree with certain aspects of the Marital Property Act. What options do we have to keep our property separate?
A properly drafted marital property agreement allows you and your spouse to set property rules for yourselves. A decision to opt out of the marital property law must be agreed to by both spouses and depends on many factors, such as your tax situation and estate planning objectives. This decision should be made with the guidance of an attorney.