When it comes to filing for a divorce in Wisconsin, the Date of Separation is important. According to Forbes, the DOS may be decided based on when one party moved out of the house, when the couple physically separated or when the person filing for divorce announced their intent. The DOS then helps couples and courts to decide what property counts as individual or marital assets.
Wisconsin is a community property state, so assets and debts obtained during the course of the marriage tends to belong equally to both parties. That said, this is just a simplified explanation of how courts decide what belongs to whom. Here are some of the assets that divorcees may be allowed to keep for themselves:
- Property designated as separate property in a prenuptial or postnuptial agreement
- Property owned by individual spouses before the marriage
- Property owned by individual spouses after the DOS
- Gifts from a third-party to an individual spouse
- Inheritances gifted to an individual spouse
CNBC also warns couples to take care when liquidating some assets in an attempt to provide fair distribution. For example, liquidating a 401(k) to pay alimony without taking the proper steps this year, could mean an enormous tax bill the following year. Instead, divorcees may wish to trade assets between themselves while still married, as when spouses transfer assets between each other, this may not trigger a taxable event.
Finally, note that Wisconsin’s status as a community property state may also affect child support and alimony payments. The state may consider the length of the marriage, the age of the children as well as the employability of the spouse seeking support before making a decision. These factors therefore affect what they may receive from the higher-earning and/or non-custodial spouse.