Joint Tenancy Outside of Marriage

Joint Tenancy Outside of Marriage

What happens when you make your significant other a joint tenant in your home and your relationship subsequently dissolves?

We have been receiving an increase in the number of calls from potential clients who tell us that they own a home as a joint tenant with their significant other and that the relationship is ending. They want to know how to go about removing their partner from the deed to their home.

If the breakup is amicable and the parties agree who should keep the home and how much compensation, if any, the other party should receive for signing a Quit Claim Deed, this process is relatively simple. More often than not, however, neither party wants to sign title in the property over to the other, nor do the parties agree on the value that the party receiving the property should pay to the other. When this deadlock occurs, the legal remedy is often costly litigation through a partition action.

A partition action between two joint tenants of a house frequently results in the Court ordering the house to be sold at a sheriff’s sale. At a sheriff’s sale, the house is sold at auction to the highest bidder. Frequently, sheriff’s sales do not result in the house being sold at fair market value. While some judges have suggested that marketing the house before the sale can increase the number of bidders and therefore, the likelihood that a house will be sold close to its fair market value, the frequent outcome of the sale is that a house is sold below its fair market value. Further, when selling a house subject to a mortgage at a sheriff’s sale, the lender will be paid first. Proceeds from the sale, if any, are then equally divided between the two joint tenants. Proceeds are divided equally regardless of whether both parties’ names are on the mortgage and without consideration to any comparative contributions that each party made in purchasing the home, paying the mortgage, property taxes, maintenance, etc.

Under Wisconsin law, Courts have found that when an individual homeowner adds another person to the home’s title by creating a joint tenancy, the homeowner gifts a one-half interest in the property to the other person. The courts have held that simply by creating a joint tenancy, each automatically owns a one-half interest in the property. When the parties are unmarried, the Courts do not consider how long the original homeowner owned the home prior to adding his or her partner, nor does the court consider whether both parties are on the mortgage or have made financial contributions to household expenses such as mortgage payments, real estate taxes, insurance payments, utilities, and other routine household expenses.

This can result in some seemingly unfair results where a party that has owned a home for years, unconditionally creates a joint tenancy with his or her partner without adding the partner to the mortgage, and then weeks later the relationship dissolves, and the original homeowner’s partner is unwilling to vacate the premises or sign a Quit Claim Deed granting his or her ownership interest back to the original homeowner.

We encourage you to contact an attorney to review your situation before you create a joint tenancy in your home with your significant other so that you fully understand the consequences of your decision should your relationship with your partner dissolve.

Parental Liability for Unmarried Parents of a Young Driver

Parental Liability for Unmarried Parents of a Young Driver

In Wisconsin, all drivers under the age of 18 are required to have a sponsor before they can be issued a driving instruction permit or a driver’s license. When a sponsor (usually a parent) signs a minor’s driver license application, the sponsor accepts complete liability for any damages caused by the minor while driving.

Pursuant to Wisconsin Statutes, “any negligence or willful misconduct of a person under the age of 18 years when operating a motor vehicle upon the highways is imputed to the parents where both have custody and either parent signed as a sponsor, otherwise, it is imputed to the adult sponsor who signed the application for such person’s license. The parents or the adult sponsor is jointly and severally liable with such operator for any damages caused by such negligent or willful misconduct.” Wis. Stat., § 343.15(2)(b).

At first glance, one would assume that the above-cited statute means that when a minor’s parents are not married, and the parents share joint legal custody of the minor, both parents are liable for damages caused by the minor while driving – but this is not the case. Wis. Stat., § 343.15(2)(a) states that “in this subsection, ‘custody’ does not mean joint legal custody as defined in s. 767.001(1s).” In 2002, the Wisconsin Court of Appeals dismissed all claims against a child’s mother for injuries and damages caused by her daughter’s driving and found that only the minor child’s father was legally responsible for damages caused by the child’s driving because the parents were divorced, and only the child’s father signed the sponsorship for his daughter to obtain a driver’s license. This finding was made by the court despite the fact the child’s mother had actual physical placement of the minor child pursuant to the terms of the court-ordered physical placement schedule at the time of the automobile accident that resulted in the lawsuit. All In Wisconsin, all drivers under the age of 18 are required to have a sponsor before they can be issued a driving instruction permit or a driver’s license. When a sponsor (usually a parent) signs a minor’s driver license application, the sponsor accepts complete liability for any damages caused by the minor while driving.

Pursuant to Wisconsin Statutes, “any negligence or willful misconduct of a person under the age of 18 years when operating a motor vehicle upon the highways is imputed to the parents where both have custody and either parent signed as a sponsor, otherwise, it is imputed to the adult sponsor who signed the application for such person’s license. The parents or the adult sponsor is jointly and severally liable with such operator for any damages caused by such negligent or willful misconduct.” Wis. Stat., § 343.15(2)(b).

At first glance, one would assume that the above-cited statute means that when a minor’s parents are not married, and the parents share joint legal custody of the minor, both parents are liable for damages caused by the minor while driving – but this is not the case. Wis. Stat., § 343.15(2)(a) states that “in this subsection, ‘custody’ does not mean joint legal custody as defined in s. 767.001(1s).” In 2002, the Wisconsin Court of Appeals dismissed all claims against a child’s mother for injuries and damages caused by her daughter’s driving and found that only the minor child’s father was legally responsible for damages caused by the child’s driving because the parents were divorced, and only the child’s father signed the sponsorship for his daughter to obtain a driver’s license. This finding was made by the court despite the fact the child’s mother had actual physical placement of the minor child pursuant to the terms of the court-ordered physical placement schedule at the time of the automobile accident that resulted in the lawsuit.

All unmarried parents of minor drivers should be aware that if they sign the adult sponsorship form for their minor child’s driver license application, they are assuming complete liability for any injuries or damages caused by the minor child while driving, even if the child is not actually placed with that parent or under the sponsoring parent’s actual custody and control when the child is involved in an accident caused by the child’s negligence or willful misconduct. If you have any questions about what you can do to protect yourself while still sponsoring your minor child on their driver license application, you may contact our office at 715-344-0890.

When Can My Child Decide Whom To Live With?

When Can My Child Decide Whom To Live With?

One of the most frequent questions posed by my clients involved in physical placement disputes is “At what age can my child decide which parent he/she wants to live with?” My short answer is usually “When he/she is 18.” Although “the wishes of the child” is one of approximately fifteen statutory factors that the court is required to consider in deciding what type of physical placement schedule to order, what the child “wants” is not always what is in the child’s best interest. In addition, the courts generally believe children (even older children) are not emotionally mature enough to make such an important decision and do not want to create a situation where children are placed in the middle of their parents’ legal disputes or where they feel forced to choose one parent or the other. In the end, it is the parents’ responsibility to make decisions about placement schedules, and when parents cannot agree, then the court has to decide what type of placement schedule is in a child’s best interest.

Even so, there are times when a child chooses to speak up about what he or she wants in terms of a placement schedule with each of his or her parents. Generally speaking, the older a child is, the more weight his or her wishes will be given. The court will also consider if the child is generally mature and if they articulate reasonable and rational reasons for their choice. For example, a 17 year old who struggles making good choices in school and in the community, and who wants to live with a parent who provides minimal supervision rather than a parent who holds them accountable, is less likely to sway the courts than a 14 year old child who does well in school and who expresses concerns about being with one parent because of that parent’s lack of involvement or interest in the child’s school work and extra-curricular interests.

Physical placement disputes are some of the most emotionally-wrought and adversarial disputes that can occur in a divorce and unfortunately, the ones who suffer the most from this acrimony are the children. The most ideal resolution is for the parents to work cooperatively to determine together what type of placement arrangement is in their child’s best interest. When that is not possible, then parents should proceed very cautiously so as to not purposefully or inadvertently put their child in the middle of the dispute, make their child feel like they need to “choose” a parent, or unduly influence the child in any way. When a parent sincerely believes that granting him or her primary placement of their child is in the child’s best interest, it may be best for them to work with an attorney to determine how best to litigate those sensitive issues without putting their child in the middle.

If you have questions or concerns about any of the information above and how it might apply to your situation, you may contact our office at 715-344-0890.

Protect Your Inheritance From A Possible Division in a Future Divorce

Protect Your Inheritance From A Possible Division in a Future Divorce

In general, Wisconsin law presumes that all property acquired by either spouse prior to or during a marriage is marital property. The law further presumes that the court should equally divide the marital property at the time of a divorce. However, the law also provides that any asset that either spouse receives as a gift from a third party, or as an inheritance, is excluded from the marital estate.

A more complex legal analysis is required when a spouse receives a gift or an inheritance and then mixes the proceeds of the gift or inheritance with marital funds (“co-mingling”) or uses the gift or inheritance to purchase something for the family, such as a family vacation or to remodel the marital residence (“donative intent”).

“Co-mingling.” Assume that three years into your marriage, you inherit $30,000. You open a money market account, title it in your name only, and fund it solely with your $30,000 inheritance. Five years later, you leave the employment that you began one year after marriage. Upon leaving your employment, you have your 401(k) rolled over into an IRA. To simplify your accounts, you decide to close out the money market account that was funded with your inheritance and deposit the proceeds into your new IRA. For the next few years you make additional contributions to your IRA from your earnings. Marital property law considers the earnings of either spouse to be a marital asset. Therefore, the funds from the 401(k) from your former employer and the additional contributions you made to your IRA from your earnings are all considered marital funds thereby making the IRA a marital asset subject to division at divorce. Six years later, your spouse files for a divorce. You would like to subtract the value from the money market account that was mixed (“co-mingled”) from the value of your IRA before determining the value of the IRA for purposes of a marital property division. However, due to market fluctuations, it is difficult to determine how much the original $30,000 inheritance is worth today. The simplest solution for the court is to find that the inherited assets have been so co-mingled with the marital assets, that the entire balance of your IRA is considered marital and subject to division in the divorce. However, if you had simply deposited the inheritance into the money market account and made no further contributions to the account, the inherited asset would remain your individual property, and except in limited circumstances, would not be subject to division in the divorce action.

“Donative Intent.” Imagine that you have been married for ten years. You and your spouse purchased a home two years into your marriage. After eight years of living in your residence, you inherit $40,000. You deposit the $40,000 into a joint checking account until you determine how you want to spend the proceeds. After four months, you decide to spend $25,000 of the inheritance to remodel the marital residence. You then decide to spend the remaining balance on a family vacation. Three years later, your spouse files for divorce. You would like the court to give you credit against the marital property division for the $40,000 that you inherited three years earlier. However, the easy response for the court is to determine that your actions in using your inheritance to remodel the marital residence and for a family vacation demonstrated an intent to “donate” the proceeds of your inheritance for a marital purpose, and you will likely receive little to no credit against the property division.

With this in mind, what can you do to protect a gift or inheritance you receive from being divided as part of the marital estate in the event of a divorce? The safest thing is to take the proceeds from the inheritance and deposit them into a newly-created account (such as checking, savings, money market, or investment account) that is in your name only. Then, do not make any additional deposits into this account from the earnings of you or your spouse, or from any other accounts or assets in either your name or your spouse’s name that have been funded in part or in whole by the earnings of you or your spouse. This will avoid the potential claim that the individual inherited assets have been so co-mingled with marital assets that the court cannot determine what portion of the asset remains individual.

If you would like to use part of your inheritance for a home remodel or a family vacation, but not risk losing the individual nature of the entire inheritance, simply withdraw the amount you would like to contribute or “donate” toward the marital purchase, and leave the balance in the individual account that was funded by your inheritance. Then, in the event that you and your spouse subsequently divorce, you have only risked losing that portion of the inheritance that you chose to “donate” to the family, and the balance should be secured as an individual asset and, therefore, not considered in the property division at the time of the divorce.

The information provided in this article is a simple overview of property division at the time of divorce in relation to inheritances. There are a number of factors that the court must consider when determining how to divide your assets in the event of a divorce which could result in costly divorce litigation and the loss of your inheritance. Therefore, should you receive an inheritance and wish to protect the individual nature of the inheritance, you should consult with a family law attorney to review your specific situation prior to making any decisions about what to do with your inheritance.