766.63 Mixed property.

(1) Except as provided otherwise in ss. 766.61 and 766.62, mixing marital property with property other than marital property reclassifies the other property to marital property unless the component of the mixed property which is not marital property can be traced.

(2) Application by one spouse of substantial labor, effort, inventiveness, physical or intellectual skill, creativity or managerial activity to either spouse's property other than marital property creates marital property attributable to that application if both of the following apply:

(a) Reasonable compensation is not received for the application.

(b) Substantial appreciation of the property results from the application.

History: 1983 a. 186; 1985 a. 37; 1991 a. 301.

Marital property presumptions and tracing principals are applied. In Matter of Estate of Lloyd, 170 Wis. 2d 240, 487 N.W.2d 644 (Ct. App. 1992).

If tracing of the marital component of a mixed asset is established under sub. (1) reclassification does not occur. Instead, a claim for reimbursement exists in favor of the marital estate measured by the enhanced value of the asset, not the marital amounts expended. Estate of Kobylski, 178 Wis. 2d 158, 503 N.W.2d 369 (Ct. App. 1993).

Under sub. (2) a party who applies substantial uncompensated labor to property may not recover if there is no resulting substantial appreciation. Estate of Kobylski, 178 Wis. 2d 158, 503 N.W.2d 369 (Ct. App. 1993).

Expenditures that result in the mere maintenance of property, including the payment of property taxes, do not result in marital property being created through mixing. Krueger v. Rodenberg, 190 Wis. 2d 367, 527 N.W.2d 381 (Ct. App. 1994).

If a nonmarital asset is mixed with marital property, tracing the nonmarital property to its nonmarital source preserves the traced component's nonmarital status. There is no requirement that the party tracing the nonmarital component also trace the mixing of the marital component. That the marital property was used to satisfy a nonmarital debt against the property does not change the nonmarital character of the traceable property. Bille v. Zuraff, 198 Wis. 2d 867, 543 N.W.2d 568 (Ct. App. 1995), 95-0007.

What Part of Yours is Mine?: The Creation of a Marital Property Ownership Interest by Improving Nonmarital Property Under Wisconsin's Marital Property Law. Knauss. 2005 WLR 855.