- In Wisconsin, outside of certain exceptions, what a couple brings to the marriage, earns, and acquires during their marriage belongs equally to both spouses. During a divorce, these shared assets can be divided 50/50 by agreement or in a manner the court deems to be equitable. If the couple has been married for some time, they may have amassed multiple kinds of property. One asset that may be implicated during divorce is inheritance.
- What happens to inheritances in my Wisconsin divorce?
Inheritance Before Your Marriage
- Wisconsin is a “community property” state meaning that a couple’s property and assets generally belong to them equally. However, there can be situations where one partner has “separate property” that belongs only to them. If one or both partners were to have inherited assets before the marriage, and those assets remain separated, they would belong to the inheriting spouse rather than the couple.
Inheritance After Your Marriage
- After a couple is married, any inheritances they receive individually would be considered their separate rather than shared (community) property. This means that neither would be required to divide their personal inheritances with the other during a divorce. However, just because an inheritance starts out as separate property does not necessarily mean it will remain that way. There can be circumstances where an inherited asset can change from being separate to community property.
Co-Mingling Inherited Assets
- When one spouse receives an inheritance such as money and adds the inherited funds to an account they share with their spouse, they have co-mingled their separate property with their community property. Or if those funds are used to buy jointly held real estate, this co-mingling can change what was once separate into community property. Additionally, if someone inherits real property and then adds their spouse to the deed, their spouse can claim that they own the asset equally during divorce. The same goes if the inheriting spouse takes inherited funds and uses them to purchase an asset for the community. For instance, if a wife inherits money and then takes those funds and sets up a mutual fund in her and her spouse’s name, the mutual fund will most likely be considered community property.
Use of Community Assets
- Another issue that can arise involves the use of community funds for the betterment of the separate property. For example, suppose the husband inherits a home that he maintains separately but improves that home using community funds. During a divorce, although the spouse is not on the deed, they may be able to claim that they contributed to the improvement of their husband’s separate property and are entitled to reimbursement for some of the expended community funds or the increased value of the property.
Pre-marital and Post-marital Agreements
- Inherited funds may also be part of a pre-marital or post-marital agreement. For example, if spouses signed an agreement before or after marriage wherein one spouse agreed to give the other a portion of their inheritance, this type of agreement may be enforceable during a divorce.
Contact an Experienced Divorce Attorney
- Financial and inheritance issues can be complex during divorce, and it’s vital that you have the advice of an experienced Wisconsin divorce attorney. Karyn Youso of First Look Family Law is a trained Wisconsin divorce attorney, Collaborative Attorney, and Mediator. She has extensive experience assisting clients before, during, and after divorce cases when inheritance is an issue. If you are planning on filing for divorce in Metro Milwaukee, call us today to set up a consultation so we can take a “first look” at your situation.