Divorces involve tough questions such as the fate of your personal property. Since Wisconsin is a community property state, it provides for a 50-50 split of marital property. If you have recently come into a large inheritance, you might fear losing much of it to your spouse.
The good news is that state law provides guidance on this issue. It is possible you will not lose any of your inheritance in a divorce settlement.
Property you may retain after divorce
According to Wisconsin law, some forms of property are exempt from division in a divorce, including an inheritance. In fact, there are multiple forms of inherited or transferred property that you should be able to keep. These include the following:
- Life insurance benefits
- Deferred employment benefits
- Retirement account proceeds
- Property acquired through right of survivorship
- Transfer on death or payable on death provisions
Money or real estate you gain from a trust also qualifies. Additionally, if you use money acquired through any of the aforementioned methods to buy property, you may be able to protect that property as well.
Possible exceptions leading to property division
Be aware that your inherited property could still qualify for division under certain circumstances. It is important to avoid commingling your inherited assets with marital assets as you will likely turn your inherited assets into marital property.
Also, state law allows a court to divide protected property if not doing so will cause hardship on the other spouse or any children from the marriage. This makes it important to craft a divorce settlement that is as fair as possible to your spouse so you may avoid losing property that you want to keep.