Terese J. Singer

Effect of Inheritance on Property Division in Wisconsin Divorce

Property division can be complicated by an inheritance received during the marriage. Among other issues, it may be necessary to retain an experienced expert who can trace assets to funds from an inheritance. In a recent Wisconsin appellate decision, a husband appealed a divorce judgment that challenged property division. He argued the court had made a mistake in several respects regarding the valuation and division of property inherited by him. If you have questions about property division in the context of a marital separation, reach out to a Wisconsin divorce attorney.

The couple in this case, both of whom worked in real estate, had married in 2007 and divorced 10 years later when they were in their fifties. Both had acquired investment properties for years. They had attorneys at earlier points in the divorce, but appeared pro se at a final pretrial conference and final evidentiary hearing. The court listened to evidence about many properties acquired before and during the marriage, as well as retirement accounts that were obtained before and during the marriage, bank accounts, multiple vehicles debt, personal property, tax liabilities and investments.

The husband had filed a financial disclosure statement that was not accurate. The primary conflict had to do with a $1.5 million inheritance received during the marriage and he needed to make a disclosure of all assets that were owned separately or jointly long before trial. The court denied maintenance to the parties. Regarding property division, the court awarded most assets to the husband, but also awarded significant assets to the wife. The husband appealed.

On appeal, he argued the lower court had made a mistake in not assigning a value to all assets subject to division. He also argued the lower court made a mistake by treating as divisible some assets arising from his inheritance. He also argued the lower court had used a problematic alternative hardship analysis. Specifically he argued that the court should have valued every asset that could be divided, since it couldn’t presume it equally divided property unless it knew the value of each asset and their total value. He argued the lower court made a mistake in this case because a portion of its decision dividing property didn’t value on multiple assets including a condo and a residence.

The court noted that the asset division didn’t assign a value to most assets given to either spouse, but found the argument lacking because it didn’t believe the lower court should be faulted for not valuing assets where the spouses hadn’t given reliable evidence about what the value should be. The lower court had found the husband’s testimony unreliable and not detailed.

The lower court decided all assets should be treated as divisible property because the husband hadn’t provided enough evidence to trace the assets to the inheritance received by the husband while married. The appellate court explained that inheritances are statutory exceptions to the general rule that property acquired during the marriage should be divided upon divorce. To decide whether property should be divided requires fact-finding as well as legal questions.

Tracing is the work of deciding value and the source of an asset or the value and source of a part of the asset. The court explained that the husband should have shown evidence that was enough to meet his burden and that the lower court accepted the evidence as true. Rather the husband simply pointed out what the lower court had failed to do. The appellate court was also not persuaded as to how properties were bought and with what money. The husband had given confusing testimony, but had never testified that all the assets he used to purchase disputed properties were inherited or that they were the sole source of funds. For these and other reasons, the appellate court affirmed the lower court’s judgment.

Many heated divorces involving controversy over property division. If you are concerned about property division in your impending divorce, you should contact a Milwaukee divorce attorney as soon as possible. To speak with a knowledgeable divorce lawyer today, please contact the law offices of Reddin & Singer, LLP online or give us a call at 414-271-6400.

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