Business

Prenuptial Agreements in a Divorce in Wisconsin

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Ein Ehevertrag mit zwei goldenen Eheringen

Prenuptial, or Premarital, Agreements are legally binding contracts entered into by couples before they get married to each other. They are also called Marital Reclassification Agreements. The purpose of a Prenuptial Agreement is to opt out of marital property laws in whole or in part. Most prenuptial agreements establish the financial rights of each spouse in the event of a death or divorce. It is important to note, however, that unless a Prenuptial Agreement specifically discusses what happens in the event of a divorce, it does not necessary apply in a divorce.  If all requirements are met, however, prenuptial agreements are generally found to be valid in Wisconsin.

Some common circumstances where prenuptial agreements are entered into are when one spouse is significantly wealthier than the other spouse, when a spouse has children from a different marriage or relationship, when one spouse has a family business he/she wishes to protect from the other spouse in the event of divorce, or when one spouse has significant debt that the other spouse does not want to be responsible for in the event of divorce.

Pursuant to statute, Wisconsin law presumes that all assets shall be divided equally in the event of a divorce. However, a Prenuptial Agreement could overcome that presumption if it specifically addresses what happens in the event of a divorce and if the court determines that it is a valid Prenuptial Agreement that will be upheld in a divorce. Additionally, it is important to know that parts of a Prenuptial Agreement may be upheld by the court, while other parts may not be. The court has the discretion to uphold all, none or only parts of the Prenuptial Agreement.

When deciding whether to uphold a Prenuptial Agreement, the court must insure that certain requirements and standards are met in order for all or part of a Prenuptial Agreement to be enforced and upheld at the time of the divorce. Some of the factors that the court looks at to determine whether a Prenuptial Agreement should apply in a divorce are whether or not the agreements were fair at the time of the signing of the Agreement (i.e. did the parties knowingly and voluntarily enter into the agreement?), whether there was a complete financial disclosure by both parties, whether both parties had adequate legal representation and whether or not a Prenuptial Agreement is fair at the time of the divorce (i.e. has their been a substantial and unforeseeable change in circumstances?).

An example of a situation that may be scrutinized for lack of fairness at the time of entering the agreement is the following: When the husband-to-be is insisting on a Prenuptial Agreement and only presents it to the bride-to-be on the eve of the wedding day (guests have already come to town, non-refundable deposits have been paid). In that circumstance, the bride-to-be may sign the Agreement without sufficiently reviewing the Agreement, without fully understanding the Agreement and her rights under the Agreement and without fully grasping what she is giving up in the future. In the case, the court may decide not to apply a Prenuptial Agreement in a divorce.

If you have questions about a Prenuptial Agreement in a divorce, please call our office at 414-258-1644 to schedule a free half-hour consultation with an attorney.

Appraisal of Assets in a Divorce in Wisconsin

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There are often disagreements in a divorce about the value of certain assets.  Most commonly, this involves real estate and personal property.  However, the value of a pension or a business also may be at issue.  Although the below information may also be relevant in other states, this article specifically applies to divorces in Wisconsin.

If the parties do not agree on a value, the only option is to have the asset appraised.  If there is a dispute, the court must have a reliable source for a value.  The court will not consider the opinions of either party because there is no real basis for their opinion.  The only way to have a reliable value is to have an expert conduct an appraisal.  Usually, the parties agree on an appraiser or the court will appoint one.  The parties then usually share in the cost.  It is always preferable to have a mutually agreed upon appraiser or a court appointed one so a situation does not arise where there are “dueling appraisers”.  This saves everyone time and money.

For real estate, there are many reputable appraisers around and each judge always has a few that he/she prefers.  As long as they are a licensed appraiser, the court will usually accept them as an expert.  Once the appraised value is determine by a neutral expert, it is very difficult to contest that value except if there is an obvious error.  If you want to object to the value, you would have to hire your own expert to testify.  This is very rare and most real estate appraisers are at least in the ballpark in terms of value.

Appraising personal property is tricky.  It is very difficult to accurately determine the fair market value of things like TV’s, furniture, etc.  Of course, the value of those items is what someone is willing to pay for them such as in a rummage sale or on Craig’s List.  Even if you only recently purchased an item, it loses resale value almost immediately.  It is also virtually impossible to itemize every single thing in a home.  There are always items that are missed or overlooked.  Appraisers do not go pawing through boxes or drawers.  There are also very few individuals who conduct these appraisals because they are time consuming and difficult.   Attorneys usually encourage their clients to resolve this issue.  However, if you absolutely can’t, an appraisal is necessary.  Most people are not happy with the results but it is the best we can do under the circumstances.

Specialized items of personal property are often appraised separately.  These items included guns, jewelry, antiques, artwork and unusual equipment or artifacts.  An appraiser with specific experience with these items is necessary.  Depending on the item and where you reside, it is often difficult to find someone and sometimes it is required to look outside of your area or even your state.  You would then need to pay for that person to come to you or ship/transport the items to that person at their location.  This becomes very time consuming and costly.

If you have a pension, this may also need to be valued.  Pensions are defined benefit plans which provide a monthly benefit to you when you retire.  Pensions often vary greatly and have different rules, policies and procedures.  An actuary or accountant can calculate the present value of that pension.  However, the calculation is based on your life expectancy and an estimated length of time that you will collect that pension.  You may live much less or much longer than your life expectancy pursuant to current actuarial tables.  Therefore, a pension evaluation is basically an educated guess. However, sometimes it is necessary if a person wants to buy out the other spouse’s share of the pension or offset it against another asset, such as a marital residence.

Lastly, a business can be appraised or valued as well.  There are many different ways to do so and an expert is required to conduct this appraisal or value as well.  For more information about a business valuation, see our blog post on this topic:  How Is a Business Valued in a Wisconsin Divorce Case.

To discuss your assets in your divorce and how they may be valued or appraised, please contact us at 414-258-1644 to schedule a free initial office consultation or visit our website for more information on property division.

What If I Need to Hire an Expert in My Wisconsin Divorce Case?

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In a divorce case, there can often be a need to hire experts to assist with specific issues.  Those experts might help with valuing assets (real estate, a business, personal property, pension, etc.) or provide testimony regarding one party’s earning capacity or ability to parent.

In Wisconsin, the Court may appoint an expert to accomplish this or a party may hire an independent expert.  If the Court appoints an expert, the Court will determine the responsibility for the expert’s fees which is generally an equal division.  The fees for an expert hired independently by one party will be that party’s sole responsibility.

An experienced family law attorney will assist you with finding the right expert for your needs.  There are often lists of experts regularly appointed by the Court in a given county.  These lists can be made available to family law attorneys and are very helpful in us finding the best match for your expert testimony needs.

To schedule a free initial office consultation to discuss hiring an expert your divorce, please contact us at 414-258-1644 or visit us at Nelson, Krueger & Millenbach, LLC  for further information.

How Is a Business Valued in a Wisconsin Divorce Case?

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When a divorce action involves ownership of a business, the Court must determine what will happen with the business.   The first step is to determine the value of that business.   An experienced family law attorney will help you hire the appropriate expert with the necessary qualifications to value the business.   In a Wisconsin divorce case, the parties can agree on an expert o r the Court can name one expert to value the business.  A party may also hire an independent expert to value the business.  If the Court names the expert or if the parties agree to one, the parties then typically share the cost of the valuation.

The expert will provide a list of necessary documents, such as tax returns and profit/loss statements, which are needed in order to determine the business’ value.   The owner or operator of the business will be required to turn over all of those documents.  If there are assets of the business, like equipment, inventory, or vehicles, a separate expert or appraisal may be needed to determine the value of those assets.

Once the expert has determined a value of a business, the parties can use that information when dividing all of the assets in a divorce.  If a party does not agree with the value, they are free to hire their own expert to conduct an evaluation.  However, the Court ordered expert is usually given more deference at trial in terms of his or her opinion.

To schedule a free initial office consultation to discuss the valuation of a business in your divorce, please contact us at 414-258-1644 or visit us at Nelson, Krueger & Millenbach, LLC for further information.

-Alison H.S. Davis