Credit transactions with married persons. 766.56(1)(1)
If a spouse applies for credit that will result in an obligation described under s. 766.55 (2) (b)
, the creditor, in evaluating the spouse's creditworthiness, shall consider all marital property available under s. 766.55 (2) (b)
to satisfy the obligation in the same manner that the creditor, in evaluating the creditworthiness of an unmarried credit applicant, considers the property of an unmarried credit applicant available to satisfy the obligation.
The recording, under s. 59.43 (1c) (r)
, of a marital property agreement or a unilateral statement or revocation under s. 766.59
does not constitute actual or constructive notice to 3rd parties. This paragraph does not affect the application of ch. 706
A creditor shall include in every written application for an extension of credit that is governed by chs. 421
a notice that no provision of a marital property agreement, a unilateral statement under s. 766.59
or a court decree under s. 766.70
adversely affects the interest of the creditor unless the creditor, prior to the time the credit is granted, is furnished a copy of the agreement, statement or decree or has actual knowledge of the adverse provision when the obligation to the creditor is incurred. The notice requirement under this paragraph does not apply to renewals, extensions or modifications or the use of an open-end credit plan.
If the applicant spouse in any credit transaction discloses the existence of a currently effective marital property agreement or a decree issued under s. 766.70
and provides a copy of it to the creditor prior to the time credit is granted or, in the case of an open-end plan, as defined under s. 766.555 (1) (a)
, prior to the time the open-end plan is entered into, the creditor is bound by any property classification, characterization of an obligation, or management and control right contained in the agreement or decree. If a spouse discloses the existence of an agreement or decree after credit is granted or an open-end plan is entered into, the creditor is not bound under this paragraph by the agreement or decree with respect to that obligation or open-end plan, including any renewals, extensions, modifications or use of the obligation or open-end plan.
When a person applies for credit, the creditor may inquire as to whether the person is married, unmarried or separated, under a decree of legal separation.
In this subsection, “extends credit" means that an open-end credit plan, as defined under s. 421.301 (27)
, is established after the determination date, or that credit other than open-end credit is extended after the determination date. The term does not include renewals, extensions, modifications or the use of an open-end credit plan. This subsection does not apply to an open-end credit plan described under s. 766.555 (2)
Except as provided in par. (c)
, if a creditor extends credit to a spouse in a credit transaction governed by chs. 421
and the extension of credit may result in an obligation described under s. 766.55 (2) (b)
, the creditor shall give the nonapplicant spouse written notice of the extension of credit before any payment is due. The notice requirement may be satisfied by providing a copy of the instrument, document, agreement or contract evidencing the obligation to pay or any required credit disclosure which is given to the applicant spouse, or by providing a separate writing briefly describing the nature of the credit extended. Notice is considered given on the date it is mailed to the address of the nonapplicant spouse provided to the creditor by the applicant spouse. If the applicant spouse informs the creditor that the spouses reside at the same address, the notice may be enclosed in an envelope addressed to the nonapplicant spouse or both spouses.
Notice is considered given under par. (b)
if the nonapplicant spouse has actual knowledge that the credit is extended or waives the notice requirement in a signed writing.
Any financial organization or any other credit-granting commercial institution that violates sub. (1)
is subject to the penalties under s. 138.20
Except as provided in par. (c)
, a creditor that fails to give notice under sub. (2) (b)
is liable to each applicant spouse in the amount of $25. Except as provided in par. (c)
, a creditor that fails to give notice under sub. (3)
is liable to the nonapplicant spouse in the amount of $25.
A creditor is not subject to a penalty under par. (b)
if the creditor shows by a preponderance of the evidence that failure to give notice was unintentional and resulted from a bona fide error notwithstanding the maintenance of procedures reasonably adapted to avoid such error.
A creditor's failure to provide the non-applicant spouse notice under sub. (3) (b) does not prevent the obligation from being classified as marital and does not affect the creditor's right to recovery. The non-applicant's only remedy is under sub. (4) (b). Park Bank-West v. Mueller, 151 Wis. 2d 476
, 444 N.W.2d 754
(Ct. App. 1989).
Relationship to consumer act. 766.565(1)(1)
In this section, “open-end credit plan" has the meaning given under s. 421.301 (27)
. The term includes only those plans governed by chs. 421
Except as provided under sub. (6)
, this section does not impose any additional or separate notice requirements on a creditor.
The spouse of a person who incurs an obligation described under s. 766.55 (2) (b)
and governed by chs. 421
may exercise rights and remedies available to the incurring spouse under chs. 421
does not apply to the spouse of a person who incurs an obligation described under s. 766.55 (2) (b)
unless that spouse also signs the writing evidencing the credit transaction or a separate guarantee or similar instrument and unless the other requirements of s. 422.305
The spouse of a person who establishes an open-end credit plan that may result in an obligation described under s. 766.55 (2) (b)
may terminate the plan by giving written notice of termination to the creditor. A writing evidencing an open-end credit plan may include a provision that authorizes the creditor to declare the account balance due and payable upon receipt of notice of termination, notwithstanding s. 425.103
. Notice of termination does not affect the liability of the incurring spouse or the availability of the incurring spouse's interest in marital property or other property of that spouse to satisfy obligations incurred under the open-end credit plan, both before and after the notice of termination. Subject to the limits under s. 422.4155 (1)
, the terminating spouse's interest in marital property continues to be available under s. 766.55 (2) (b)
to satisfy obligations incurred in the interest of the marriage or family both before and after notice of the termination. A creditor may consider in its evaluation of subsequent applications for credit the fact that a prior open-end credit plan offered by the creditor and entered into by the applicant spouse has been terminated under this subsection.
Written notice to a spouse under s. 422.415 (2) (a)
concerning an increase in the rate of finance charge is not effective with respect to the interest of the nonincurring spouse in marital property unless notice is given to both spouses. Notice is considered given on the date it is mailed by the creditor. The notice may be enclosed in an envelope addressed to the incurring spouse at the last-known address of that spouse appearing on the records of the creditor if a statement appears on the face of the envelope alerting the spouses that the envelope contains important information for both spouses.
With respect to consumer credit transactions, the division of banking may promulgate rules to interpret this chapter and chs. 421
, consistent with the purposes and policies of this chapter and chs. 421
History: 1985 a. 37
; 1995 a. 27
Protection of bona fide purchasers dealing with spouses. 766.57(1)(a)
“Bona fide purchaser" means a purchaser of property for value who was not knowingly a party to fraud or illegality affecting the interest of the spouses or other parties to the transaction, does not have notice of an adverse claim by a spouse and acted in the transaction in good faith.
“Purchase" means to acquire property by sale, lease, discount, negotiation, mortgage, pledge or lien, or otherwise to deal with property in a voluntary transaction other than a gift.
A purchaser gives “value" for property acquired in return for a binding commitment to extend credit, as security for or in total or partial satisfaction of a preexisting claim, by accepting delivery pursuant to a preexisting contract for purchase, or, generally, in return for any consideration sufficient to support a simple contract.
Notice of the existence of a marital property agreement, a marriage or the termination of a marriage does not affect the status of a purchaser as a bona fide purchaser.
Marital property purchased by a bona fide purchaser from a spouse having the right to manage and control the property under s. 766.51
is acquired free of any claim of the other spouse and of any claim asserted through or under the other spouse. The effect of this subsection may not be varied by a marital property agreement.
History: 1983 a. 186
; 1985 a. 37
Protection of trustees dealing with spouses. 766.575(1)(b)
“Governing instrument" means the contract or other instrument pursuant to which a trustee has possession or control of property. The term includes, in the case of trustees whose rights, duties and responsibilities are fixed by court order or statute or both, the court order and the applicable statutory provisions as modified by any court order, as they would apply if this chapter had not been enacted.
“Notice of claim" means a written notice, by or on behalf of a spouse, former spouse, surviving spouse or person claiming under a deceased spouse's disposition at death, that the person claims to be entitled to property in the trustee's possession or control, specifying the portion of property to which the claim relates.
“Property" includes, in addition to the meaning given under s. 766.01 (15)
, any proceeds of property, any income earned on property or derived from property and any income or proceeds derived from proceeds or income previously received and reinvested.
Except as provided in sub. (3)
, in a court order or in the terms of a trust, the classification of property in the possession or control of a trustee shall not affect the trustee's right and duty to administer, manage and distribute the property in accordance with the terms of the governing instrument and the trustee may rely on and act in accordance with those terms.
If at least 5 business days before distributing property in accordance with the terms of a governing instrument a trustee has received at its principal business office a notice of claim, the trustee shall notify the persons to whom the property would otherwise be distributed, whether as a matter of right or in the exercise of any discretion granted under the governing instrument, of the receipt of the notice of claim and shall suspend the distribution of the portion of property to which the claim relates for 14 business days.
If within 14 business days after receiving the notice of claim the trustee receives, as purporting to support the claim, a decree, marital property agreement or proof that a legal action has been commenced, including a copy of an election filed pursuant to s. 861.08 (1)
, to establish the validity of the claim, the trustee shall suspend distribution of the portion of the property to which the claim relates pending resolution of the validity of the claim.
If documentation purporting to support the claim is not submitted as described in par. (b)
, the trustee may proceed to distribute the property as if the notice of claim had not been received.
A trustee is not liable to any person for any claim for damages as a result of distribution of property in accordance with the terms of the governing instrument prior to its receipt of a notice of claim under sub. (3)
or for any damages claimed as a result of suspension of distribution under this section. A person who files a notice of claim under sub. (3)
is not entitled to recover fees or expenses charged against such property by the trustee prior to or in connection with the establishment of the validity of his or her claim. A trustee shall pay interest or earnings which accrue during the suspension of any action under sub. (3)
Marital property agreements. 766.58(1)(1)
A marital property agreement shall be a document signed by both spouses. Only the spouses may be parties to a marital property agreement. A marital property agreement is enforceable without consideration.
A marital property agreement may not adversely affect the right of a child to support.
Rights in and obligations with respect to any of either or both spouses' property whenever and wherever acquired or located.
Management and control of any of either or both spouses' property.
Disposition of any of either or both spouses' property upon dissolution or death or upon the occurrence or nonoccurrence of any other event.
Modification or elimination of spousal support, except as provided in sub. (9)
Making a will, trust or other arrangement to carry out the marital property agreement.
Providing that upon the death of either spouse any of either or both spouses' property, including after-acquired property, passes without probate to a designated person, trust or other entity by nontestamentary disposition. Any such provision in a marital property agreement is revoked upon dissolution of the marriage as provided in s. 767.375 (1)
. If a marital property agreement provides for the nontestamentary disposition of property, without probate, at the death of the 2nd spouse, at any time after the death of the first spouse the surviving spouse may amend the marital property agreement with regard to property to be disposed of at his or her death unless the marital property agreement expressly provides otherwise and except to the extent property is held in a trust expressly established under the marital property agreement.
Choice of law governing construction of the marital property agreement.
Any other matter affecting either or both spouses' property not in violation of public policy or a statute imposing a criminal penalty.
applies to transfers at death under a marital property agreement.
A marital property agreement may be amended or revoked only by a later marital property agreement.
Persons intending to marry each other may enter into a marital property agreement as if married, but the marital property agreement becomes effective only upon their marriage.
A marital property agreement executed before or during marriage is not enforceable if the spouse against whom enforcement is sought proves any of the following:
The marital property agreement was unconscionable when made.
That spouse did not execute the marital property agreement voluntarily.
Before execution of the marital property agreement, that spouse:
Did not receive fair and reasonable disclosure, under the circumstances, of the other spouse's property or financial obligations; and
Did not have notice of the other spouse's property or financial obligations.
Unless the marital property agreement expressly provides otherwise, a marital property agreement that classifies a deferred employment benefit plan or an individual retirement account as marital property does not affect the operation of s. 766.62 (5)
Unless the marital property agreement expressly provides otherwise, marital property agreement that classifies as marital property the noninsured spouse's interest in a policy that designates the other spouse as the owner and insured does not affect the operation of s. 766.61 (7)
. In this paragraph, “owner" has the meaning given in s. 766.61 (1) (a)
and “policy" has the meaning given in s. 766.61 (1) (c)
The issue of whether a marital property agreement is unconscionable is for the court to decide as a matter of law. In the event that legal counsel is retained in connection with a marital property agreement the fact that both parties are represented by one counsel or that one party is represented by counsel and the other party is not represented by counsel does not by itself make a marital property agreement unconscionable or otherwise affect its enforceability.
Modification or elimination of spousal support during the marriage may not result in a spouse having less than necessary and adequate support, taking into consideration all sources of support.
If a marital property agreement modifies or eliminates spousal support so as to make one spouse eligible for public assistance at the time of dissolution of the marriage or termination of the marriage by death, the court may require the other spouse or the other spouse's estate to provide support necessary to avoid that eligibility, notwithstanding the marital property agreement.
If the spouses agree in writing to arbitrate any controversies arising under this chapter or a marital property agreement, the arbitration agreement is enforceable under ch. 788
Married persons or persons intending to marry each other may record a marital property agreement in the county register of deeds office under s. 59.43 (1c) (r)
A provision of a document signed before the determination date by spouses or unmarried persons who subsequently married each other, which provision affects the property of either of them and is enforceable by either of them without reference to this chapter, is not affected by this chapter except as provided otherwise in a marital property agreement made after the determination date.
If a provision or an amendment to a provision in a document described under par. (a)
is intended to negate, apply or modify any right or obligation which may be acquired under 1983 Wisconsin Act 186
, 1985 Wisconsin Act 37
, or a community property system, the provision or amendment is enforceable after the determination date if the document was enforceable when executed or, if it is executed after April 4, 1984, either was enforceable when executed or would be enforceable if it were executed after the determination date.
This subsection does not affect a marital property agreement executed under s. 766.585
With respect to a provision of a marital property agreement that is effective upon or after dissolution of the marriage or termination of the marriage by death, any statute of limitations applicable to enforcement of the provision is tolled until dissolution of the marriage or termination of the marriage by death, respectively.
After the death of a spouse, no action concerning a marital property agreement may be brought later than 6 months after the inventory is filed under s. 858.01
. If an amended inventory is filed, the action may be brought within 6 months after the filing of the amended inventory if the action relates to information contained in the amended inventory that was not contained in a previous inventory.
The court may extend the 6-month period under par. (b)
for cause if a motion for extension is made within the applicable 6-month period.
Limitations on the effect of marital property agreements for state income tax purposes are set forth in ch. 71