Wisconsin Community Property Guide

Wisconsin stands out as one of only nine community property states in the nation—and the only one in the Midwest. Under the Wisconsin Marital Property Act (Chapter 766), courts begin divorce proceedings with a presumption of 50/50 division of marital property. Understanding these rules is essential whether you're pursuing an uncontested or contested divorce.

This comprehensive guide explains how Wisconsin classifies property, what factors allow courts to deviate from equal division under Wis. Stat. § 767.61, and strategies to protect your financial interests during divorce.

Wisconsin's Community Property System

Wisconsin adopted the Uniform Marital Property Act in 1986, making it a community property state. This means property acquired during the marriage is presumed to be owned equally by both spouses—regardless of whose name is on the title or who earned the money to buy it.

The community property designation has important implications:

• 50/50 presumption: Courts start with the assumption that an equal split is fair
• Ownership during marriage: Both spouses have an immediate, undivided one-half interest in marital property
• Management rights: Either spouse can generally manage and control marital property
• Creditor implications: Marital property may be available to satisfy either spouse's debts

Unlike the eight other community property states (mostly in the West and Southwest), Wisconsin developed its system from the Uniform Marital Property Act rather than Spanish or French civil law traditions.

Marital Property vs. Individual Property

Under Wis. Stat. § 766.31, Wisconsin distinguishes between "marital property" (subject to division) and "individual property" (generally kept by the owner). This classification is crucial to property division.

Marital Property Includes:

• All property acquired during marriage by either spouse, regardless of title
• Income earned by either spouse during marriage
• Retirement contributions made during the marriage
• Appreciation of marital assets during the marriage
• Property purchased with marital funds
• Debts incurred during marriage for family purposes

Individual (Separate) Property Includes:

• Property owned before marriage (and kept separate)
• Gifts received by one spouse individually (from someone other than the other spouse)
• Inheritances received by one spouse
• Property acquired during legal separation
• Property excluded by a valid marital property agreement

Property acquired before the "determination date"—typically the marriage date or January 1, 1986 (when the Marital Property Act took effect), whichever is later—may be classified as individual property.

The 50/50 Presumption: Wisconsin's Starting Point

Wisconsin courts begin property division with a presumption that equal division is fair. Under Wis. Stat. § 767.61(3), this presumption applies to all marital property—real estate, bank accounts, retirement funds, businesses, vehicles, and personal property.

However, this presumption is rebuttable. Either spouse can present evidence showing why equal division would be unfair. If convinced, the court can award 60/40, 70/30, or even more unequal splits based on statutory factors.

The equal division presumption also applies to marital debts. Courts typically split debts incurred during marriage equally, unless factors suggest otherwise.

Factors That Allow Deviation from 50/50

Under Wis. Stat. § 767.61(3), courts may deviate from equal division after considering:

1. Length of the Marriage

Short marriages often result in each party keeping what they brought in, while long marriages tend toward equal division regardless of contributions. Courts recognize that over time, the lines between "yours" and "mine" blur.

2. Property Brought to Marriage

What each spouse owned before marriage can justify unequal division. If one spouse brought significant assets while the other brought little, courts may account for this—especially in shorter marriages.

3. Substantial Gifts and Inheritances

While gifts and inheritances received by one spouse are typically individual property, if they've been commingled with marital assets or used for family purposes, courts consider their source when dividing property.

4. Contribution to Education, Training, or Earning Power

If one spouse supported the other through school or professional training, increasing their earning capacity, the supporting spouse may receive a larger property share to compensate for their contribution.

5. Age and Health of the Parties

A spouse with health issues or advanced age may have reduced earning capacity, justifying a larger property award to meet future needs.

6. Contribution to Marital Property

Both monetary and non-monetary contributions matter. A spouse who stayed home to raise children and manage the household made valuable contributions that Wisconsin courts recognize—even without direct income.

7. Economic Circumstances of Each Spouse

Under Wis. Stat. § 767.61(3)(j), courts consider "other economic circumstances of each party, including pension benefits, vested or unvested, and future interests." This encompasses earning capacity, employability, and financial needs.

8. Custodial Provisions for Children

When minor children are involved, courts may award the family home to the primary placement parent to maintain stability. Learn more about who gets the house in a divorce.

9. Written Agreements

Marital property agreements (prenuptial or postnuptial) can alter the default 50/50 presumption if valid and enforceable.

The Hardship Exception for Individual Property

Wisconsin has a unique provision allowing courts to divide individual (separate) property in certain circumstances. Under Wis. Stat. § 767.61(2)(b):

If the court finds that refusing to divide individual property would create a hardship on the other spouse or on the children of the marriage, the court may divide individual property between the spouses.

This means even premarital assets, gifts, or inheritances could potentially be divided if excluding them would leave a spouse or children in financial hardship. Courts use this power sparingly but it provides important protection.

Marital Waste and Dissipation

Under Wis. Stat. § 767.63, if one spouse wasted marital assets within one year before filing, the wasted property is presumed to be marital property subject to division. This means the dissipating spouse may be charged with their waste when calculating equalization.

Common forms of marital waste include:

• Gambling losses
• Spending on extramarital affairs
• Transferring assets to third parties
• Destroying or damaging property
• Excessive or unreasonable spending

Dividing Retirement Accounts

Retirement accounts are often the largest marital asset after the family home. Wisconsin treats the portion of retirement benefits accrued during marriage as marital property subject to division.

Deferred Employment Benefit Plans

Under Chapter 766, "deferred employment benefit plans" include pensions, 401(k)s, profit-sharing plans, stock-ownership plans, annuity plans, and IRAs. The marital portion is calculated based on contributions and growth during the marriage.

QDROs and Division Methods

For 401(k)s and similar plans, division typically requires a Qualified Domestic Relations Order (QDRO)—a court order directing the plan administrator to transfer a portion to the non-employee spouse. Options include:

• Immediate offset: One spouse keeps the retirement account while the other receives equivalent value in other assets
• Deferred division: The account is divided, with each spouse receiving their share at retirement
• Shared payment: Both spouses receive benefits when the employee spouse retires

Wisconsin Retirement System (WRS)

Public employee pensions through the Wisconsin Retirement System have specific division procedures. These plans require careful calculation of the marital portion and appropriate orders for division.

Terminable Interest Provision

Under Wis. Stat. § 766.62(5), if the non-employee spouse dies before the employee spouse, the non-employee spouse's marital property interest in a deferred employment benefit plan terminates. This unique provision affects how parties should plan for contingencies.

Dividing Business Interests

Businesses started or grown during marriage are marital property subject to division. Key considerations include:

• Valuation: Determining fair market value through income, asset, or market approaches
• Active vs. passive growth: Growth from spousal efforts is marital; market appreciation may be individual
• Goodwill: Personal vs. enterprise goodwill affects what's divisible
• Buyout structure: Lump sum vs. installment payments over time

How Wisconsin Divides Debts

Marital debts follow similar rules to assets—debts incurred during marriage are presumed marital and subject to equal division. Courts consider:

• Purpose: Was the debt for family benefit or individual use?
• Timing: Was it incurred during the marriage?
• Who benefited: Student loans often follow the degree-holder
• Ability to pay: Income and earning capacity

Important: Divorce orders only bind spouses—not creditors. If a joint debt is assigned to your ex-spouse but they don't pay, creditors can still pursue you.

Key Dates in Wisconsin Property Division

Several dates affect property classification:

• Determination date: Marriage date or January 1, 1986, whichever is later—marks when property begins accruing as marital
• Filing date: May affect classification of post-filing assets
• Valuation date: Courts have discretion—typically use trial date
• 120-day waiting period: Wisconsin requires at least 120 days from filing before finalizing a divorce

Practical Tips for Wisconsin Property Division

1. Document everything: Gather bank statements, retirement accounts, tax returns, and property records from before and during marriage
2. Trace individual property: Keep records proving premarital assets, gifts, and inheritances were kept separate
3. Identify all assets: Don't overlook stock options, deferred compensation, airline miles, cryptocurrency, or valuable collections
4. Get proper valuations: Businesses, real estate, and professional practices require expert appraisal
5. Understand the 50/50 presumption: Start negotiations expecting equal division, then identify factors justifying deviation
6. Consider the 120-day waiting period: Use this time to prepare documentation and negotiate terms
7. Address debts carefully: Ensure joint debts are refinanced into individual accounts when possible
8. Plan for retirement division: QDROs take time—don't wait until after the divorce is final

Estimate Your Wisconsin Divorce Costs

Property division complexity significantly affects divorce costs. Use our calculator to estimate expenses based on your situation:

Next Steps for Your Wisconsin Divorce

Understanding Wisconsin's community property framework is essential for protecting your financial interests. Key takeaways:

• Wisconsin is a community property state—one of only nine in the nation
• Courts presume 50/50 division is fair, but this can be rebutted
• Multiple statutory factors allow deviation from equal division
• The hardship exception can allow division of individual property
• Retirement accounts require QDROs for proper division
• Marital waste within one year of filing is presumed divisible

For official forms and filing information, visit the Wisconsin Courts Self-Help Forms or the Wisconsin State Law Library Marital Property Resources. Given the complexity of community property rules and the finality of property division orders, consulting with a family law attorney is strongly recommended for divorces involving significant assets.