Division of Investments

Divorce Attorney Representing Residents of Milwaukee

When couples have been together over years or decades, many aspects of their finances may become comingled, particularly investment accounts. Often, these accounts are held in both parties’ names, or the couple makes a decision during the marriage to put all of their money in one partner’s account, assuming that it will be available to both of them over the years. Sometimes, when one spouse has a particularly good pension plan, or a match on a retirement fund, the couple may even choose to prioritize retirement savings and investments in that individual’s accounts. In almost all scenarios, this is done with the understanding that both spouses will benefit down the road. It is these complexities that make the division of investments, pensions, and retirement accounts during a divorce difficult. At Reddin & Singer, LLP, Milwaukee divorce lawyer Terese J. Singer understands Wisconsin’s approach to dividing investments and retirement in divorce. She can guide you through the process in a manner that will protect your financial interests.

The Wisconsin Approach to Dividing Investments, Retirement Funds, and Pensions

Wisconsin law generally treats property acquired by either spouse during the course of a marriage as the property of both spouses. It also presumes that, upon a divorce, such property will be equally divided between the spouses. For example, retirement benefits are generally considered marital property to be divided equally under Wisconsin law. One exception to this rule to take into account, however, is that investments originally received as gifts or inheritance are excluded from the property to be divided equally. This means that a spouse who inherited a substantial amount of money and brought that money into a marriage will generally be allowed to keep such sums upon a divorce.

While this may seem straightforward, in practice it can be complicated to determine what the couple rather than an individual spouse own, since funds acquired before and during a marriage are often co-mingled. Additionally, retirement funds held by one spouse are often not easily liquidated and divided between both partners. In situations in which it may be virtually impossible to single out the original value of an inheritance or gift, a court may find that the funds have been so co-mingled that they should all be considered marital property to be divided equally. Additionally, if funds are used toward a marital purpose, such as buying a home, a court may decide that the funds were essentially “donated” to the marriage. This is also known as donative intent. Again, this means that the funds are more likely to be split equally.

Dealing with the division of retirement accounts and pensions is very complex and, without proper guidance, may lead to significant financial losses for a spouse. Under Wisconsin and federal laws, most retirement income, including pensions, is known as “pension benefits.” Some pension benefits are subject to the Employee Retirement Income Security Act (ERISA), and the division of these benefits must comply with ERISA. Under ERISA, pension benefits may not be assigned to another party or alienated from their holder unless a court orders otherwise through a qualified domestic relations order (QDRO). An order from a Wisconsin court to equally divide retirement benefits is only a QDRO if it is properly addressed to the retirement plan participant, it lists the amount or percentage of benefits to be paid to each individual subject to the order, it lists the number of total benefits to be paid or the time period to which the order applies, and it lists the retirement plans to which it applies. With limited exceptions, it must not require the plan to provide any type of benefit not previously available, it must not require increased benefits from the plan, and it must not conflict with any other QDROs.

Protect Your Financial Future by Enlisting a Divorce Lawyer in Milwaukee

Dividing a retirement plan or pension in Wisconsin requires that spouses and courts closely abide by state and federal laws. Typically, a property division attorney, or a third-party provider, will be needed to draft a QDRO, and a failure to properly do so can cause serious problems for spouses down the road. This makes it important to find a legal representative who is familiar with the law on the division of investments and retirement funds. At Reddin & Singer, LLP, Milwaukee divorce lawyer Terese J. Singer understands how to handle complicated and high-asset divorce proceedings. She can assist people in Port Washington, Mequon, Racine, Waukesha, West Bend, and other communities throughout Washington, Racine, Ozaukee, and Waukesha Counties. To set up a free appointment, contact our office online or at (414) 271-6400.