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Marital property includes all income and possessions a couple acquires after their "determination date", however, there are certain exceptions. The determination date is the latest of: the couple's marriage day; the date when they both took up residence in Wisconsin; or Jan. 1, 1986. There are two important related concepts. One is survivorship marital property, which passes directly to the surviving spouse upon the other's death. It does not pass under a will. An example would be a house that has both spouses' names (and only their names) on the title. A second is deferred marital property. This term applies to property that would have been classified as marital property except that it was acquired before the couple's determination date. Say a couple moved to Wisconsin in 1995. All the property they brought with them did not automatically become marital property just because they moved to Wisconsin. But if one spouse dies, the survivor may have rights to a certain amount of money, based on the value of what would have been marital property if the Marital Property Act had been in effect during the entire marriage. The upshot is that the surviving spouse in this situation has some economic protection, even if not the beneficiary of the other's estate.
A marital property agreement is a contract between husband and wife that classifies property (assets and liabilities) as either marital or individual, and would be reviewed by a court upon either divorce and/or death. If property is classified as individual, then the spouse who owns the property may give it to anyone he or she wishes. This means that the other spouse has no legal interest in the property, which is contrary to Wisconsin’s Marital Property Law. By agreeing to classify property as individual, the spouses are forgoing his or her legal claim to the property. Please note that marital property agreements are not always upheld in court. Reasons for a court disregarding a couple’s stated intentions in a marital property agreement include, but are not limited to: inadequacy of counsel, no counsel, or one party did not fully disclose his or her assets.
Marital property agreements can be entered before or after marriage. The agreements can be used three different ways:
- state that everything brought into a marriage will be individual, and everything after will be marital;
- state that everything brought into as well as acquired after marriage will be individual; or
- state that everything brought into as well as acquired after marriage will be marital.
When should you consider a MPA?
- marriage with blended families;
- marriage when property should follow the bloodline - i.e. pass interest in lake property from mother to child(ren) and skip her husband; or
- if a need to clarify ownership is crucial.
This brings me to the end of my month of definition posts. Thanks for reading. Remember, a blog post is not legal advice. I advise you to consult with an attorney for counsel specific to your situation.
I'll be back tomorrow with more posts....specifically, a book recommendation.