Wisconsin is a community property state meaning all property acquired during the marriage, including the house, is divided equally during a divorce. If you don't sell or co-own the home, a spouse can keep it if they negotiate a buyout, give up other assets, or take the house instead of alimony.
Dividing Property and Debt in Wisconsin
When dividing property in Wisconsin, both assets and debts are divided equally. As always when it comes to property division, if both parties can agree, the process goes much smoother. But, when parties cannot come to a mutual decision, the courts will divide property as equitably as possible. Most cases don’t get to that point where the court decides because most people like to make decisions for themselves.
Focusing on the Marital Home
Whether the house is going to be sold and split, kept and bought out, or shared and maintained–it’s rarely an easy decision. The marital home is often the largest piece of joint property considered in a divorce, so decisions surrounding the home aren't taken lightly. We recommend consulting with a family law firm such as Sterling Lawyers because once an agreement is signed and finalized, it’s really hard to go back and change your mind.
Below outlines the three main options when it comes to dividing the marital home:
- Sell the House
- Agree to a Buyout
- Co-Own the Home
Start Dividing Property & Debts
Get your WI property division worksheet here. Document property, assets, and debts. Think through how you want to equalize your property division, and avoid a lengthy battle in court.
For Immediate help with your family law case or answering any questions please call(262) 221-8123now!
Sell the House
If neither party wants the home or neither party can afford it on their own, then they can sell the house and split the profits. When thinking about selling the house, focus on two aspects, the financial implications and the emotional implications. Financial implications surround things like the mortgage and the realtor, but personal refers to those who lived there–kids or adults–and the sentimental value they hold in the home. Who sells the home and how any profits are split should be included in the marital settlement agreement.
What Is the Process if My Spouse and I Decide to Sell the Family Home?
Once the decision is made to sell the house, the financial aspects are the sole focus. First, assess the current market and decide whether now is a good time to sell the house or not. The house may need to be sold anyways but waiting may be the better option.
You will need to understand any debt associated with the house including the mortgage and any home equity lines of credit, so you can plan how to pay them off. This is also when you should look into capital gains taxes and any other taxes regarding the house.
Finally, prepare the house for sale by making any repairs or upgrades, contacting a realtor to help with the sale, and agreeing on an asking price.
Agree to a Buyout
Parties can agree to a buyout or trade where one party keeps the house, buys out the other party, and refinances the home in their name alone. A buyout is a great option when there is a substantial amount of other assets in the marital estate. When there are enough marital assets to balance out the home’s equity, the party keeping the house can exchange those assets for the other party’s share of the equity.
The disadvantages to this option are two-sided because the buyer could pay too much if the house depreciates in value or the seller could lose out on future appreciation of the property. There are then three common ways a buyout occurs:
1.) Give Up Other Assets
The most common buyout is where one party keeps the house in exchange for other marital assets, such as investments or retirement accounts. To do this fairly, a third party assesses the value of the house before the division occurs then spouses agree on what to exchange.
2.) Buyout Payments Over Time
A buyout can also be paid over a period of time. After a third party assesses the value of the marital home, buyout terms are outlined and included in the divorce and marital settlement agreement. Under these circ*mstances, co-ownership exists until the final buyout payment is made.
3.) In Place of Spousal Support
The third common option happens when spousal support (or alimony) is part of the negotiations. In this scenario, the spouse who would pay spousal support can “give” the house to the other spouse in exchange for not paying or paying significantly less spousal support.
Co-Own the House
The final and least common option is to continue to co-own the home. Most often this occurs when a buyout is being paid overtime, as mentioned above. Co-owning is uncommon because there are distinct financial disadvantages:
- Credit Reporting – Both parties will need to list the mortgage as an open expense which can lead to difficulty financing other purchases.
- Upkeep Costs – Both parties are responsible for tracking and splitting upkeep costs, which adds points of tension.
- Taxes – Though both parties are liable for the mortgage, only one party can claim the interest deduction on their taxes.
- Death – A living will is needed to protect against issues if one party were to pass away and creating that will is an added cost.
- Bankruptcy – If the other person were sued or filed for bankruptcy, it's difficult to protect yourself and your share of the property.
Are you ready to move forward? Call(262) 221-8123 to schedule a strategy session with one of our attorneys.
FAQs
If both spouses have been living as husband and wife in the house — also called the marital home — then it belongs to each of them equally. This is true even if only one spouse's name is on the lease or deed. It is also the case even if one spouse bought the house before the marriage.
Who gets the house in a divorce in Wisconsin? ›
Wisconsin is a community property state meaning all property acquired during the marriage, including the house, is divided equally during a divorce. If you don't sell or co-own the home, a spouse can keep it if they negotiate a buyout, give up other assets, or take the house instead of alimony.
Is an LLC marital property in Wisconsin? ›
Your spouse owns all of your property (with little exception) including your business. Wisconsin is a marital property state.
How does marital property work in Wisconsin? ›
UNDER THE MARITAL PROPERTY SYSTEM, EACH SPOUSE HAS A 50% OWNERSHIP INTEREST IN PROPERTY ACQUIRED DURING MARRIAGE DUE TO THE EFFORTS OF EITHER OR BOTH SPOUSES, SUCH AS WAGES, DEFERRED EMPLOYMENT BENEFITS, LIFE INSURANCE, INCOME FROM PROPERTY AND CERTAIN APPRECIATION OF PROPERTY.
Does it matter who files for divorce first in Wisconsin? ›
Wisconsin is a no-fault divorce state, meaning that the only requirement for filing for a divorce is that the spouses consider the marriage to be “irretrievably broken” with no hopes of reconciliation. It also means that it does not matter who files for the divorce first, as there is no real advantage to filing first.
Who usually wins the house in a divorce? ›
In California, divorcing spouses usually split community property evenly. However, each spouse can generally keep their separate property. Community property is property obtained during the marriage. This includes debts and assets, though spouses can agree in writing that certain items belong to only one person.
Does the wife always get the house in a divorce? ›
In community property states like California, marital assets and debts are typically split 50/50 between the spouses, unless they decide on a different arrangement.
How long do you have to be married in Wisconsin to get half of everything? ›
A marriage of any duration will split up marital assets 50/50. In a short-term marriage (less than 5 years) one can make the argument that assets from before the marriage are not marital assets and should not be split up.
How is a business divided in a divorce in Wisconsin? ›
Your spouse may receive part or even half of your business in a divorce. Since it may be difficult to physically divide a business, a court may allocate another marital asset that is equal to the value of your business. The court may also order assets from the business to be paid to the ex-spouse.
Can my wife work under my LLC? ›
If your spouse works for your business, you can hire them as a regular employee. This means drafting an employment contract, outlining their duties and giving them a wage that meets minimum wage requirements. Keep in mind that you also have to pay them through regular payroll and pay payroll taxes.
Under Wisconsin divorce law, all property owned by the spouses (except gifted and inherited property) is presumed to be divided equally, even if acquired prior to the marriage. While these rights are protected, spouses have the ability to alter Wisconsin property and divorce law through a marital property agreement.
Does Wisconsin have a 7 year common law marriage? ›
Common law marriage, or cohabitation, was abolished by Wisconsin state law in 1917 and as such is not recognized in Wisconsin. It does not matter how long the couple has lived together, and the circ*mstances surrounding the cohabitation do not matter either. A common law marriage is not considered a legal marriage.
What is a step up in basis for marital property in Wisconsin? ›
Since marital property is treated as community property by the Internal Revenue Code, all marital property receives a full step-up in basis upon the death of either spouse. Furthermore, Wisconsin statutes also provide this same "double step-up" result for state tax purposes.
What is the average cost of a divorce in Wisconsin? ›
The Real Cost of DivorceIn Wisconsin. The average cost of a Wisconsin divorce without children in 2024 is $11,300. With children, the average cost of a divorce in Wisconsin is between $16,900 and $30,000 depending on child placement, child support, alimony and property division.
Is it better to be the one who filed for divorce? ›
Yes, there are some benefits to filing for divorce before your spouse. Being the person who initiates divorce proceedings gives you more control over the timing of the process as well as the location where it takes place.
Who initiates divorce first? ›
Around 69% of divorces in heterosexual marriages are initiated by women. Women often feel less satisfied in marriages due to unmet emotional needs, poor communication, and lack of independence.
How does house work after divorce? ›
California's Property Division Laws
Each spouse has an equal interest in it. In a divorce, community property is subject to a 50/50 split. In contrast to community property is separate property. This includes assets or debts one of the spouses individually held before the marriage.
Do I have to support my wife during separation? ›
Short- or long-term spousal support, also called separation maintenance (or alimony in a divorce) may be required if one partner is financially reliant on the other. You may also be entitled to spousal support if your marriage lasted a certain period of time, or because of a variety of other factors.
How long does the average divorce take in Wisconsin? ›
A typical Wisconsin divorce takes six months to one year to finalize. After you file for divorce and papers are served, there's a mandatory 120-day waiting period before the final hearing.
