MARITAL PROPERTY AND COHABITATION AGREEMENTS
The Law Center handles agreements for all kinds of couples, whether they are married or unmarried, whether their estates are large or small, and whether they are of the same sex or different.
Marital Property Agreements
Wisconsin is one of many states that follow a “marital property” (also referred to as “community property”) system to determine how income, assets, debts, and liabilities are owned and managed by spouses during marriage and the allocation of these things upon the end of the marriage, by death or divorce.
Marital property law recognizes the joint contributions both spouses make to a marriage, and provides that, but for some limited exceptions, income, assets, debts, and liabilities acquired during marriage belong to both spouses as marital property. This is even true of assets that are solely titled in one spouse’s name, debts that are incurred by only one spouse, and income that is earned by one spouse through his or her employment.
Wisconsin law presumes that income, assets, debts, and liabilities acquired during marriage are marital property, unless it can be proven otherwise (in other words, unless these things can be proven to be the “individual property” of either spouse).
Under Wisconsin’s marital property laws, it is very easy for either spouse’s individual property to inadvertently become marital property. If an asset is marital property, then each spouse is entitled to a portion of the asset (usually half); if a debt is marital debt, then a creditor may pursue not only the spouse that incurred the debt, but also the non-incurring spouse, for repayment.
A Marital Property Agreement (often referred to as a “Pre-Nuptial” or “Post-Nuptial” Agreement) allows a couple to determine for themselves how Wisconsin’s marital property system will apply to them. For example, a couple may execute a comprehensive Marital Property Agreement that classifies all of the property each spouse owned at their date of marriage as the individual property of each spouse, respectively.
On the other hand, the couple may reclassify a few assets as individual property and leave all other assets as marital property. A Marital Property Agreement can also be a key part of estate tax planning for some couples. Finally, although Wisconsin’s marital property laws are meant to apply during marriage and at the death of either spouse, a Marital Property Agreement can be drafted to apply at divorce as well. When such an agreement is applicable at divorce, the potential for disagreement during the divorce process about certain issues (e.g., disposition of property, decisions regarding spousal maintenance/alimony, etc.) can be significantly limited.
While no one gets married intending to someday get divorced, preemptively and proactively making decisions about certain issues in a Marital Property Agreement, prior to any major conflict or court proceeding, can make a divorce less contentious and less expensive.
The Law Center can help you determine how Wisconsin’s marital property system will affect your income, assets, debts, and liabilities, and can help you enter into a Marital Property Agreement to meet your needs.
Marital property laws do not apply to unmarried couples. However, this does not mean that rights and obligations do not accrue between an unmarried couple who is residing together. In Watts v. Watts, the Wisconsin Supreme Court allowed the plaintiff to lay claim to some of the property that she and her former boyfriend had accumulated during their relationship.
Because of Watts, Wisconsin law recognizes the rights and obligations that accrue between unmarried cohabitating partners during their relationship, and allows for one or both partners to bring an action under contract law theories to recover property from a former partner. For example, if one partner moves into a house owned by the other, and contributes financially to the household expenses (mortgage payments, property taxes, maintenance expenses, etc.), the partner who does not have title to the home may still have equitable ownership rights in the property. Given that, the non-title holding partner may seek to recover his or her contributions to the home from the title holding partner in the event of a break-up.
A Cohabitation Agreement sets forth the rights and obligations of a couple who are residing together in the same household, but are not yet (or may never become) married. A Cohabitation Agreement may, for example, set forth the partners’ agreements regarding ownership and management of assets and liabilities for debts, payment of living expenses, and division of assets and allocation of debts in a break-up. Having a Cohabitation Agreement in place can reduce conflicts about these issues during a break-up, and can help prevent one partner from accruing an equitable ownership interest in the property of the other, if that is not intended.
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