Being a little married

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There is a saying that you cannot be a little bit pregnant. Well, apparently, you can be a little married.

On June 8, 2021, the Supreme Court of Wisconsin affirmed the decision of the Court of Appeals in Kemper Independence Insurance Company v. Islami, 2021 WI 53, 397 Wis.2d 394, 959 N.W. 2d 912. Unfortunately, the Supreme Court did not resolve the issue of most practical importance to divorce practitioners: What is the difference between a divorce and a legal separation?

In the case, Ydbi and Ismet Islami were legally separated, but still living together in a house insured by Kemper. Ydbi intentionally set fire to the home and concealed facts from Kemper about his involvement in the fire. Ismet was not involved with the arson. The Court of Appeals affirmed the trial court’s grant to Kemper of summary judgment.

The Supreme Court held that (1) Ydbi is an insured under the terms of the policy because Wisconsin’s marriage laws recognize Ydbi as Ismet’s spouse; (2) the policy’s “concealment or fraud” condition precludes coverage for Ismet, a conclusion unaffected by the policy’s intentional loss” exclusion; and (3) Wis. Stat. §631.95(2)(f) does not apply because the record lacks any evidence showing Ydbi’s arson constituted “domestic abuse” against Ismet, as statutorily defined. 2021AP000030

Most importantly from a family law perspective, the Supreme Court held that Wisconsin law “plainly distinguishes between a divorce and a legal separation…a judgement of legal separation does not terminate a marriage. As this court has previously noted, ‘there are…rights and obligations remaining in the marriage after a legal separation.’ Herbst v. Hansen, 46 Wis.2d697, 706, 176 N.W.2d380 (1970)). [G]iven that Ismet and Ydbi never initiated divorce proceedings but instead received a judgment of legal separation, they remained married under Wisconsin law.”

OK, then, what, pray tell, is a legal separation? Precisely what rights and obligations remain? Debts? Inheritance? Being responsible if your legally separated spouse burns down your house?

These are not esoteric questions, either. One of the most common questions ask by my potential clients when exploring their options is to explain the difference between a divorce and a legal separation. In addition, according to the Government Accountability Office in 2004 (the most recent statistic I could find – there are probably more now as laws have a way of proliferating), more than 1,138 federal rights and protections are conferred on American citizens upon marriage. The areas include Social Security benefits, veterans’ benefits, health insurance, Medicaid, hospital visitation, estate taxes, retirement savings, pensions, family leave, and immigration law.

In addition, since the IRS treats Wisconsin as a Community Property state for tax reporting purposes, does this mean that legally separated parties need to file either jointly or MFS? Or exchange income/deduction information each year?It is conceded that the Supreme Court did not have to define Legal Separation to reach its decision and that perhaps this is a matter more for the legislature than the judiciary. Still, the result is one of vagueness and confusion. It would have been nice if the Supreme Court would have used this rare opportunity to provide some clarity as opposed to the opposite.