Wis. Stat. § 767.61
Wis. Stat. § 767.61
See notes in 1985 Wis. Act 37, marital property trailer bill.
2005 Wis. Act 443 contains explanatory notes.
Accounts receivable of a medical clinic in which the husband was a partner were properly viewed by the trial court as salary. Johnson v. Johnson, 78 Wis. 2d 137, 254 N.W.2d 198 (1977). A veteran disability pension is to be considered as earned income and not as an asset to be divided between the parties. Leighton v. Leighton, 81 Wis. 2d 620, 261 N.W.2d 457 (1978). There are at least three methods for valuing pension rights. Whether the use of any method is appropriate depends upon the status of the parties and whether the result is a reasonable valuation of the marital asset. Bloomer v. Bloomer, 84 Wis. 2d 124, 267 N.W.2d 235 (1978). Support of stepchildren is a relevant factor in dividing marital property. Fuerst v. Fuerst, 93 Wis. 2d 121, 286 N.W.2d 861 (Ct. App. 1979). Compensation for a person who supported a spouse while the spouse was in school can be achieved through both property division and maintenance payments. Lundberg v. Lundberg, 107 Wis. 2d 1, 318 N.W.2d 918 (1982). A federal pension in lieu of social security must be included in a marital property division. Mack v. Mack, 108 Wis. 2d 604, 323 N.W.2d 153 (Ct. App. 1982). Unless a divorce decree specifically terminates a spouse as the beneficiary of a life insurance policy and the insurance company is notified, the spouse's beneficiary status is not affected by the divorce decree. Bersch v. VanKleeck, 112 Wis. 2d 594, 334 N.W.2d 114 (1983). The trial court may consider a cross-purchase formula in a partnership agreement in determining the value of the partnership interest, including professional goodwill. Lewis v. Lewis, 113 Wis. 2d 172, 336 N.W.2d 171 (Ct. App. 1983). A lien on real estate awarded in a divorce judgment was a mortgage, not a judgment lien, even though the term "mortgage" was not used in the court order. Wozniak v. Wozniak, 121 Wis. 2d 330, 359 N.W.2d 147 (1984). This section does not require a judge to terminate a joint tenancy. Lutzke v. Lutzke, 122 Wis. 2d 24, 361 N.W.2d 640 (1985). The use of gift money to buy a home as joint tenants changed the character of the money from separate property to marital property. Weiss v. Weiss, 122 Wis. 2d 688, 365 N.W.2d 608 (Ct. App. 1985). See also Zirngibl v. Zirngibl, 165 Wis. 2d 130, 477 N.W.2d 637 (Ct. App. 1991). A prenuptial agreement entered into prior to the adoption of sub. (11) [now sub. (3) (L)] was enforceable in a subsequent divorce. Hengel v. Hengel, 122 Wis. 2d 737, 365 N.W.2d 16 (Ct. App. 1985). A premarital agreement intended to apply at death was not applicable to a divorce. Levy v. Levy, 130 Wis. 2d 523, 388 N.W.2d 170 (1986). Whether property agreements are inequitable under sub. (11) [now sub. (3) (L)] is discussed. Button v. Button, 131 Wis. 2d 84, 388 N.W.2d 546 (1986). A premarital agreement was inequitable because the parties did not fairly and reasonably disclose assets or have independent knowledge of one another's financial status. Schumacher v. Schumacher, 131 Wis. 2d 332, 388 N.W.2d 912 (1986). A personal injury claim for medical malpractice is property subject to division. Richardson v. Richardson, 139 Wis. 2d 778, 407 N.W.2d 231 (1987). The trial court may consider the former inherited status of divisible property although it has lost its exempt status through commingling. Schwartz v. Linders, 145 Wis. 2d 258, 426 N.W.2d 97 (Ct. App. 1988). Increase in the value of inherited property attributable to the non-owning spouse's efforts is divisible property. It is not necessary for the non-owning spouse to show that a failure to divide the asset will result in a hardship to him or her. Haldemann v. Haldemann, 145 Wis. 2d 296, 426 N.W.2d 107 (Ct. App. 1988). Chapter 766, the Marital Property Act, does not supplant the divorce property division provisions of ch. 767. Kuhlman v. Kuhlman, 146 Wis. 2d 588, 432 N.W.2d 295 (Ct. App. 1988). Gifted and inherited property is subject to division in cases of hardship. A party seeking division bears the burden of showing that failure to divide will result in financial privation. Popp v. Popp, 146 Wis. 2d 778, 432 N.W.2d 600 (Ct. App. 1988). A presumption exists that an injured party is entitled to all future payments under a structured settlement, but the payments are subject to the s. 767.255 [now s. 767.61] factors. Krebs v. Krebs, 148 Wis. 2d 51, 435 N.W.2d 240 (1989). A property division may be modified under s. 806.07. However the supremacy clause prevents a division to be modified after a debt thereunder is discharged in bankruptcy. Spankowski v. Spankowski, 172 Wis. 2d 285, 493 N.W.2d 737 (Ct. App. 1992). When gifted or inherited property has appreciated in value during the marriage due to the efforts of both spouses, the appreciation is a part of the marital estate. Schorer v. Schorer, 177 Wis. 2d 387, 501 N.W.2d 916 (Ct. App. 1993). Determining fair market value of a closely-held corporation turns on the credibility of the experts as well as the methods and analyses employed by the witness. Schorer v. Schorer, 177 Wis. 2d 387, 501 N.W.2d 916 (Ct. App. 1993). A buy-sell agreement may provide a method for determining the value of an interest in a partnership, but does not as a matter of law establish the value. Sharon v. Sharon, 178 Wis. 2d 481, 504 N.W.2d 415 (Ct. App. 1993). Accounts receivable may be excluded from the marital estate if evidence indicates there is a link between the receivables and salary and that dividing the receivables would adversely affect the ability to pay support or maintain professional or personal obligations. Sharon v. Sharon, 178 Wis. 2d 481, 504 N.W.2d 415 (Ct. App. 1993). While income from gifted property is subject to division, trust income received by a beneficiary with only a future interest in the trust corpus is a gift itself, not income from a gift, and not subject to division. Friebel v. Friebel, 181 Wis. 2d 285, 510 N.W.2d 767 (Ct. App. 1993). A divorce decree that awarded 1/2 of the husband's pension to the wife divested the husband of that half interest. Although the husband had failed to effectuate the transfer as required by the divorce decree, the wife's half interest was not an asset in the husband's bankruptcy estate and there was no dischargeable debt to the wife. Dewey v. Dewey, 188 Wis. 2d 271, 525 N.W.2d 85 (Ct. App. 1994). Hardship under sub. (2) (b) and "privation" under Popp requires something more than an inability to continue living at a predivorce standard. Fair and equitable is not the standard for including gifted and inherited property in a division. Doerr v. Doerr, 189 Wis. 2d 112, 525 N.W.2d 745 (Ct. App. 1994). The offspring of gifted or inherited animals are not excluded from division by this section. If an asset no longer exists, a court cannot exclude it from the marital estate. Preuss v. Preuss, 195 Wis. 2d 95, 536 N.W.2d 101 (Ct. App. 1995), 94-1148. Bonuses and fees, like regular income, are not divisible as property but are to be considered in determining a fair division or maintenance. Long v. Long, 196 Wis. 2d 691, 539 N.W.2d 134 (Ct. App. 1995), 94-2533. The marital estate is usually valued as of the date of divorce, but when conditions over which a party has no control arise, the special circumstances may warrant deviation from the rule. Long v. Long, 196 Wis. 2d 691, 539 N.W.2d 134 (Ct. App. 1995), 94-2533. For the character of inherited or gifted property to be changed to marital property subject to division, changes to the property as a result of the marital relationship, whether by labor or expenditures, must substantially increase its value. Spindler v. Spindler, 207 Wis. 2d 327, 558 N.W.2d 645 (Ct. App. 1996), 96-0591. An uneven property division is not the only remedy to deal with squandering of marital assets. Equitable claims against 3rd parties that affect the rights of parties to the divorce, such as a claim against a 3rd-party title holder of property claimed to actually be part of the marital estate, may be appropriate. Zabel v. Zabel, 210 Wis. 2d 336, 565 N.W.2d 240 (Ct. App. 1997), 96-3092. Income generated by an asset is separate and distinct from the asset itself. Income from the asset is also separate from the appreciation of the asset. As to property division, retained earnings, or the appreciation in value occasioned by the expenditure of the earnings, are a marital asset subject to division. Metz v. Keener, 215 Wis. 2d 626, 573 N.W.2d 865 (Ct. App. 1997), 97-1443. Appellate review of a trial court's valuation of a closely-held business in a divorce action should proceed on the clearly erroneous standard. When the buyout provisions of a shareholder agreement did not replicate an arm's length transaction it was reasonable for the trial court to find that the buyout figure was not indicative of fair market value. Siker v. Siker, 225 Wis. 2d 522, 593 N.W.2d 830 (Ct. App. 1999), 98-0553. There are 2 types of postnuptial agreements: 1) family settlement agreements that contemplate the continuation of the marriage, and 2) separation agreements that are made after separation in contemplation of a separation. The former are presumed to be binding on the parties under s. 767.255(3) (L) [now s. 767.61(3) (L)]. The latter are governed by s. 767.10 [now s. 767.34] and constitute a recommendation jointly made by the parties to the court regarding what the judgment should provide. Evenson v. Evenson, 228 Wis. 2d 676, 598 N.W.2d 232 (Ct. App. 1999), 98-0803. See also VanBoxtel v. VanBoxtel, 2001 WI 40, 242 Wis. 2d 474, 625 N.W.2d 284, 99-0341. An agreement made in contemplation of divorce, entered into after the parties agreed to the divorce, was subject to s. 767.10 [now s. 767.34], not s. 767.255 [now s. 767.61]. When a party withdrew his consent before court approval, the agreement was unenforceable. Ayres v. Ayres, 230 Wis. 2d 431, 602 N.W.2d 132 (Ct. App. 1999), 98-3450. A spouse's pension, whether or not existing before the marriage, is part of the marital estate subject to division. Award of the premarital portion of a pension to the spouse holding title was improper when there was not sufficient grounds for deviation from an equal property division. Hokin v. Hokin, 231 Wis. 2d 184, 605 N.W.2d 219 (Ct. App. 1999), 98-3680. The fact that a property interest is contingent and not vested does not mean that it may be ignored in a property division. An insurance company deferred compensation plan for agents, although not a pension plan, was similar enough to a pension to be treated like one when dividing the marital estate. Garceau v. Garceau, 2000 WI App 7, 232 Wis. 2d 1, 606 N.W.2d 268, 98-3241. If property has no fair market value, the court cannot place an independent value upon it, and it should not be included in the marital estate. A state employee's sick leave account has no fair market value as it has no cash value and is not transferable. Preiss v. Preiss, 2000 WI App 185, 238 Wis. 2d 368, 617 N.W.2d 514, 99-3261. Section 40.08(1) does not permit the division of a state employee's deferred compensation account. Preiss v. Preiss, 2000 WI App 185, 238 Wis. 2d 368, 617 N.W.2d 514, 99-3261. When a farm that a divorcing couple did not own but had lived on for the first 13 years of their marriage was gifted to one spouse and the couple divorced shortly thereafter, the trial court erred when it determined the farm's increase in value after the gift resulted from the efforts of the marital partnership without considering whether the couple's efforts throughout the marriage served as a catalyst for the increase in value. Richmond v. Richmond, 2002 WI App 25, 250 Wis. 2d 647, 640 N.W.2d 220, 01-1064. In agreeing to accept a percentage share of a variable asset in a property settlement, a party agrees to assume a proportionate share of any subsequent gains or losses until the asset is liquidated. Taylor v. Taylor, 2002 WI App 253, 258 Wis. 2d 290, 653 N.W.2d 524, 02-0118. An unequal division of an asset based entirely upon an analysis of the parties' respective contributions to the marriage without addressing any of the other statutory factors applied an incorrect standard of law. Sub. (3) requires that any deviation from the presumptive equal property division be upon consideration of all statutory factors. The court may summarily conclude that certain of the factors are irrelevant, and failure to consider all the statutory factors might be harmless, particularly when the overlooked factors are only marginally relevant or not relevant at all. LeMere v. LeMere, 2003 WI 67, 262 Wis. 2d 426, 663 N.W.2d 789, 01-2204. The circuit court's determination of inequity under sub. (3) (L), as is its property division determination under s. 767.255 [now s. 767.61], is discretionary. The record in this case supported a finding that enforcing the parties' prenuptial agreement was inequitable. Krejci v. Krejci, 2003 WI App 160, 266 Wis. 2d 284, 667 N.W.2d 780, 02-3376. When there was no dispute that the parties intended to divide the value of pensions equally as of the time of the divorce, but were not able to identify a legal mechanism at the time to do so, the circuit court could impose a constructive trust on the pensions when the titled spouse died and the benefits were payable only to the titled spouse's subsequent spouse. Sulzer v. Diedrich, 2003 WI 90, 263 Wis. 2d 496, 664 N.W.2d 641, 02-0036. A creditor's right to reach property subject to division in a divorce is not determined by this section but is driven solely by the classification into which the obligation falls under s. 766.55. Sokaogon Gaming Enterprise v. Curda-Derickson, 2003 WI App 167, 266 Wis. 2d 453, 668 N.W.2d 736, 02-0924. Section 802.12(3) (c) cannot limit a circuit court's power to consider the equity of agreements. However, circuit courts must give greater deference to an arbiter's award of a property division under s. 802.13(3) (c) than they would to other types of agreements. Franke v. Franke, 2004 WI 8, 268 Wis. 2d 360, 674 N.W.2d 832, 01-3316. A stock option contract, like an unvested pension, is not a mere gratuity, but an enforceable contract right. It is an economic resource, comparable to pensions and other employee benefits, and thus a form of property. The trial court did not misuse its discretion by declining to divide vested stocks options that had an exercise price in excess of the current market value of the stock or in valuing the vested portion of stock options at the difference between the market value of the stock and the exercise value. Maritato v. Maritato, 2004 WI App 138, 275 Wis. 2d 252, 685 N.W.2d 379, 685 N.W.2d 379, 03-2074 Although under Preiss sick leave accounts are non-divisible property because they cannot be sold or transferred and, therefore, have no fair market value, a sick leave account does have value to the owner and may be a consideration under sub. (3) (j) to justify deviation from an equal property division. Steiner v. Steiner, 2004 WI App 169, 276 Wis. 2d 290, 687 N.W.2d 740, 03-0931. In the absence of any expert testimony or other evidence to the contrary, the court may rely on its knowledge and experience to engage in reasonable speculation regarding the anticipated tax impact on the present value of retirement assets. Rumpff v. Rumpff, 2004 WI App 197, 276 Wis. 2d 606, 688 N.W.2d 699, 03-2646. A circuit court's decision on how to divide divisible property is discretionary. The application of sub. (2) (a) to non-divisible property is not discretionary but involves both fact finding and legal questions. The categorization of property as non-divisible under sub. (2) (a) does not necessarily dictate how that property will be treated when the court divides divisible property. Under some circumstances courts may avoid hardship or inequities that might result from according property non-divisible status. Derr v. Derr, 2005 WI App 63, 280 Wis. 2d 681, 696 N.W.2d 170, 03-2181. When a gifted non-divisible asset was used as collateral for a loan used for the benefit of the marriage, both parties were liable for the debt, and marital funds were used to make payments on the debt, the debt was divisible. Putting property at risk by using it as collateral for a marital loan does not create a presumption that the owning spouse intended to donate part or all of the property to the marriage rendering it divisible. Derr v. Derr, 2005 WI App 63, 280 Wis. 2d 681, 696 N.W.2d 170, 03-2181. Generally, a final division of property is fixed for all time and is not subject to modification. Section 806.07 is applicable to divorce cases, but permits reopening of final judgments only in extraordinary circumstances. Post-divorce employer modification of a pension, years after a divorce, that was thoroughly negotiated and divided at the time of the divorce does not compel reopening the divorce judgment. Winkler v. Winkler, 2005 WI App 100, 282 Wis. 2d 746, 699 N.W.2d 652, 04-1231. The law does not require a party to a prospective divorce to take advantage of an opportunity to acquire property that would increase the value of the marital estate. Noble v. Noble, 2005 WI App 227, 287 Wis. 2d 699, 706 N.W.2d 166, 04-2933. Since it was anticipated, based on testimony, that the payor spouse would sell or refinance real estate to make an equalization payment in the property division, there was no reason for the court to have considered the tax consequences of the payor's withdrawing the money from his IRA to make the payment. That the payor ultimately chose to raise funds through a method that resulted in significant penalties to himself was his erroneous exercise of discretion, not the trial court's. Scheuer v. Scheuer, 2006 WI App 38, 290 Wis. 2d 250, 711 N.W.2d 698, 04-3162. To require a party to share in the debts created by a spouse's unjustified depletion of marital assets would constitute a failure to consider the total contribution of each of the parties to the marital estate. Chapter 767 makes recompense available when one spouse has mismanaged or dissipated assets. Depending on the circumstances of the case, one spouse's failure to pay tax debts can be considered the mismanagement or dissipation of assets and therefore marital waste. Covelli v. Covelli, 2006 WI App 121, 293 Wis. 2d 707, 718 N.W.2d 260, 05-1960. Although a circuit court may consider substantial gifted assets when dividing the marital estate, it may not divide the marital estate to work a de facto splitting of those assets where there is no hardship. While substantial assets not subject to division by the court is a factor to be considered in departing from equal division of property under sub. (3), sub. (3) begins with the presumption that the marital estate should be evenly divided. Absent some special circumstances demonstrating that some unfairness would result from equal division, the presumption should stand. Grumbeck v. Grumbeck, 2006 WI App 215, 296 Wis. 2d 611, 723 N.W. 2d 778, 05-2512. The court did not err in awarding maintenance out of the proceeds of a covenant not to compete that arose from the sale of shares already to be a gift, and not subject to property division under sub. (2). The payments were in exchange for a service to be performed; refraining from doing business in a way that would be harmful to the purchasers. Grumbeck v. Grumbeck, 2006 WI App 215, 296 Wis. 2d 611, 723 N.W. 2d 778, 05-2512. The burden of proving that property is non-divisible lies with the party arguing that this property is exempt from division who must establish: 1) the original gifted or inherited status of the property; and 2) that the character and identity of the property has been preserved. The identity inquiry addresses whether the gifted or inherited asset has been preserved in some present identifiable form and is more a matter of tracing the asset. The character inquiry examines whether the owning spouse intended to donate non-divisible property to the marriage and is more clearly denoted as donative intent. Wright v. Wright, 2008 WI App 21, 307 Wis. 2d 156, 747 N.W.2d 690, 06-2111. Retained earnings from a separate asset are usually considered to be a marital asset. However, in the instant case the trial court found that the current retained earnings of disputed stock were not income generated, but rather were insurance proceeds from the loss of an asset. When insurance proceeds compensate for the loss of a gifted asset, they are non-divisible. When insurance proceeds compensate for the loss of income, they are divisible. Wright v. Wright, 2008 WI App 21, 307 Wis. 2d 156, 747 N.W.2d 690, 06-2111. Commingling of separate and marital property does not automatically taint the gifted asset. When it was undisputed that nothing has ever been withdrawn from a gifted account, it was very easy to trace the original gifted asset, despite the addition of a divisible dividend within the account, and the divisible dividend did not taint the status of the original gift. However, other unaccounted for deposits resulted in the transmutation of the account into a divisible account. Wright v. Wright, 2008 WI App 21, 307 Wis. 2d 156, 747 N.W.2d 690, 06-2111. Tracing and transmutation principles may be applied to cases that do not involve gifted or inherited property. Tracing can identify such property as originally indivisible, but proof of donative intent can establish that the property's identity and character changed, and it was transmuted into divisible joint property. In particular, when separate property presumed to be indivisible is transmuted through a joint tenancy, it is effectively transferred to marital property, and tracing does not cause the property to revert back to its original separate property identity. Steinmann v. Steinmann, 2008 WI 43, 309 Wis. 2d 29, 749 N.W.2d 145, 05-1588. Tracing is nothing more than the exercise of following an asset trail. If an asset, or component part of an asset, can be traced to a source, the court relies on other principles and rules to determine whether the traced asset is divisible or non-divisible. That the existence of subsequently purchased property can be traced to income generated by non-divisible property does not mean that the purchased property is non-divisible. Rather, once property is transferred from separate property to joint ownership, the property becomes part of the marital estate subject to division even if it is inherited property generally deemed indivisible. Steinmann v. Steinmann, 2008 WI 43, 309 Wis. 2d 29, 749 N.W.2d 145, 05-1588. There were no reasonable grounds for reversing the circuit court's decision not to allocate debts based on future tax liability, the exact amount of which was a matter of speculation, based on the lower court's conclusion that the IRS is best qualified to determine what amount a divorcing couple owes the IRS. Steinmann v. Steinmann, 2008 WI 43, 309 Wis. 2d 29, 749 N.W.2d 145, 05-1588. It was within the trial court's discretion whether to include as part of the marital estate subject to division stock options earned during the marriage that the trial court viewed as having no value at the time of divorce because the cost to exercise the options was greater than the price of the stock. The trial court erroneously exercised its discretion by excluding the options from division because it erroneously viewed their potential value as being almost solely a function of what the owner spouse would do in his business after the divorce, despite their decline in value having been caused largely by the broader economy, and largely ignored the fact that the options were earned while the parties were married. Heppner v. Heppner, 2009 WI App 90, 319 Wis. 2d 237, 768 N.W.2d 261, 08-2020. When valuing a business interest that is part of the marital estate for purposes of property division, a circuit court shall include the entire value of the salable professional goodwill attendant to the business interest. The circuit court did not double count the value of professional goodwill when it included the goodwill in the divisible marital estate, and then based a maintenance award on the professional spouse's expected future earnings. As with income from an income earning asset, income from a professional practice is separate from the value of the practice as it exists at the time of the property division and is properly considered in determining maintenance. McReath v. McReath, 2011 WI 66, 335 Wis. 2d 643, 800 N.W.2d 399, 09-0639. A retirement fund must be divided even if unvested at the time of divorce. When dividing an unvested fund, the rule is that the trial court must consider all the circumstances and evaluate the probability that the party who has a contingent right to a pension will eventually enjoy that pension. A court may not simply assign a value of zero to all contingent interests. Derleth v. Cordova, 2013 WI App 142, 352 Wis. 2d 51, 841 N.W.2d 552, 12-2018. Federal law precludes a state court from dividing military nondisability retirement pay pursuant to state community property laws. McCarty v. McCarty, 453 U.S. 210 (1981). An insured's beneficiary designation under servicemen's group life insurance policy prevailed over a constructive trust imposed by a state court. Ridgeway v. Ridgeway, 454 U.S. 46 (1981). Federal statute provides that a state may treat as community property, and divide at divorce, a military veteran's retirement pay but exempts from this grant of permission any amount that the federal government deducts as a result of a waiver of retirement pay that the veteran must make in order to receive disability benefits. A state cannot treat as community property, and divide at divorce, the waived portion of the veteran's retirement pay, even when the waiver occurs long after the divorce order and results in reduced payments to the receiving spouse. Howell v. Howell, 581 U.S. ___, 137 S. Ct. 1400, 197 L. Ed. 2d 781 (2017). See also Mansell v. Mansell, 490 U.S. 581, 109 S. Ct. 2023, 104 L. Ed. 2d 675 (1989). To receive military disability benefits, federal law requires a retired veteran must give up an equivalent amount of retirement pay. In Mansell v. Mansell, the U.S. Supreme Court held that federal law forbade states from treating the waived portion as community property divisible at divorce. In this case a state court awarded to a veteran's spouse a portion of the veteran's total retirement pay upon their divorce. Long after the divorce, the veteran waived a share of the retirement pay in order to receive disability benefits. Under Mansell the state could not subsequently increase, pro rata, the amount the divorced spouse receives each month from the veteran's retirement pay in order to indemnify the divorced spouse for the loss caused by the veteran's waiver. Howell v. Howell, 581 U.S. ___, 137 S. Ct. 1400, 197 L. Ed. 2d 781 (2017). ERISA did not preempt a Wisconsin court order awarding a spouse 1/2 of a beneficiary's interest in a pension. Savings and Profit Sharing Fund of Sears Employees v. Gago, 717 F.2d 1038 (1983). Dilemma v. Paradox: Valuation of an advanced degree upon dissolution of a marriage. 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