Property Divisions &
Maury D. Beaulier, Esq.
The Marital Estate
Losing Non-Marital Value
Commingling Non-Marital Assets
Assets with Marital Funds
Appreciation of Non-Marital
Interests into New Assets
Real Estate & The Schmitz Formula
In any divorce case, there is usually a division
of assets and a determination of each person's responsibility for debts.
Wisconsin, like most states, is a "marital property" state. This means that any
asset acquired and any debt incurred during the marriage is the asset or debt of
THE MARITAL ESTATE
In a divorce, the parties divide up what is called the
"Marital Estate." The marital estate includes any assets or debts that were
acquired during the marriage. Each spouse is deemed to have an equal
interest in marital assets or debts.
This true no matter how property is titled or held and no
matter which spouse's job paid for the asset or which party incurred the debt.
That means the marital estate includes a 401 K account or a credit card debt
that is in your spouseís name alone. In fact, marital property is inclusive and
encompasses 401K plans, stock plans, stock options, real estate, frequent flier
entitlements, bank account proceeds, couches, chairs, cars, utility debts,
credit card debts and any other form of asset or liability.
Essentially, the law views marriage as a civil partnership
with many of the characteristics of a business partnership. When you join a
business general partnership, each partner has an equal interest in the
ownership of the business and is exposed equally to the liabilities of the
partnership. This is true even if one partner incurs the debt on behalf of the
partnership or one partner performs all the work making the partnership a more
valuable asset. The best way to determine what debt exists is to run a credit
Where there are property disputes in divorce, Courts are
not particularly fond of hearing those issues. This particularly true when the
dispute involves assets that are primarily household furnishings. As a result,
courts often render very unsatisfactory Orders related to the division of
household furnishings. In fact, in one memorable case, the Judge gave one spouse
half of the dining room table and half the chairs and the other spouse the other
half. In the end, the judge stated, "if you donít like what I did here, you will
go out in the hall and find a better solution." This is certainly an aberration
and not the norm. However, it does underscore the Courtís general dislike in
dealing with property issues.
There are any number of ways to creatively divide
household furnishings and personal property when disputes occur. In some cases,
the parties may make a list and alternately choose an asset. In other cases,
parties may bid on each item of property and the highest bidder both receives
the asset and has that value credited to him or her as part of the property
division. This may result in an payment from one spouse to the other to equalize
the value of the assets received by each. In yet other cases, the one party may
create two lists of assets and the second party then has first choice which list
and assets he/she will receive.
Mediation is always a potential option for such divisions.
Certain assets may be excluded from the marital estate
which means that they are not divided between the parties. These are called
non-marital assets. Any non-marital assets that you possess remain yours and any
non-marital assets of your spouse remain his assets. Under Minnesota Statutes ß
518.54, subd. 5 and existing case law, non-marital assets may include:
Prenuptial Exclusions. An asset excluded by a
valid prenuptial agreement;
Personal Injury Proceeds.
Personal injury settlements are generally considered personal to
the injured party and are non-marital in nature;
proceeds or assets from an inheritance;
Gifts. Any asset
acquired as a gift to one, but not both parties.
- Premarital. Any asset acquired before the
marriage (if the asset was encumbered by a loan that was paid off during the
marriage, it may only have a partial non-marital value);
It is important to recognize that all assets are
considered part of the marital estate unless proven otherwise by a
"preponderance of the evidence." This places a significant burden on any
person making a non-marital claim. It is essential that any and all documents
including documents of title, receipts, or canceled checks that support your
non-marital claims must be provided. Any failure to provide documentation may
result in the division of the asset in the divorce.
Non-marital assets may have both a marital and
non-marital value. In some cases, non-marital assets may lose their non-marital
characteristic. This can occur in several ways:
If non-marital proceeds are co-mingled with
marital proceeds so that is becomes difficult to identify the non-marital asset,
the non-marital characteristic may be lost. For example, pl
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