When a marriage ends, one of the biggest questions is how the couple’s assets and liabilities will be divided. As a marital property state, decisions about dividing property in Wisconsin generally start with the presumption that each spouse is entitled to one-half of the couple’s assets and one-half of its liabilities, regardless of whether those assets and debts are in one spouse’s name alone.
However, if you and your spouse entered into a valid a prenuptial agreement before your marriage, that agreement will be presumed to be enforceable in the event of a divorce. Prenuptial agreements are not ironclad, but they are intended to reflect the couple's agreements, understandings and intentions for their assets.
Prenuptial agreements can provide for an unequal distribution of a couple’s property and are more common in a second or subsequent marriage, where one or both spouses desire to protect assets for their respective children. A couple also may sign a prenuptial agreement in a situation where there is a significant disparity between the intended spouses’ incomes and/or assets, or when one party is bringing a significant amount of debt into the marriage.
As with most contracts, prenuptial agreements can be challenged by either party. However, typically it is the spouse who would be foreclosed from receiving certain assets or maintenance due to the prenuptial agreement that brings such a challenge in family court.
Prenuptial agreements in Wisconsin may not be enforceable if the parties failed to make a full financial disclosure to each other before getting married. Without knowing a future spouse’s assets, liabilities, and income, the parties cannot fully grasp the potential implications of the document being signed.
Similarly, if either party didn’t have the opportunity to hire an independent attorney, review and propose changes to the agreement’s terms, or understand what was being signed, the prenuptial agreement may be vulnerable to a challenge. Similarly, agreements signed under duress or pressure from the other party may not be upheld by the family court.
While a prenuptial agreement does not need to divide assets or liabilities equally, Wisconsin law directs that it does need to be fair to both parties at the time it is signed and at the time of divorce. If something unforeseeable happens to either party before the divorce is final, and dividing assets according to the prenuptial agreement would no longer be equitable, it may not be upheld.
If a couple has a valid prenuptial agreement that goes unchallenged (or which overcomes such a challenge), the agreement will dictate how assets and liabilities are divided in the couple’s divorce.
Prenuptial agreements generally provide that some or all of the assets and liabilities that each spouse brings into the marriage will be treated as their own separate assets or obligations. Agreements also typically specify how joint assets will be divided in the event of a divorce, and how assets or debts accumulated during the term of the marriage will be treated.
Whether or not you and your spouse have a valid prenuptial agreement, it is common to have questions about how your assets and debts will be divided when your divorce is finalized.
The experienced, knowledgeable family law attorneys at Schott, Bublitz & Engel, s.c. in Waukesha can help. To learn more, contact us today online or call us at 262.827.1700.