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November 16, 1983


Appeal from a judgment of the circuit court for Waukesha county: Robert T. McGraw, Judge.

Scott, C.j., Brown, P.j., and Robert W. Hansen, Reserve Judge.

The opinion of the court was delivered by: Brown

When a divorce court is called upon to include inherited property in the divisible estate pursuant to the hardship exception of sec. 767.255, Stats., we hold the decision is a matter within the sound discretion of the trial court. It is not a factual determination subject to the clearly erroneous/great weight and clear preponderance of the evidence test. Following this Conclusion, we find that the trial court did not abuse its discretion and affirm.

Raymond Asbeck appeals from the trial court's decision to include inherited property in the division of the marital estate. He and Theresa Asbeck were married in 1938. Theresa commenced divorce proceedings against Raymond in November of 1980. They have three adult children. Both Raymond and Theresa were in good health when the divorce was granted in 1982.

The parties accumulated a substantial marital estate, which apparently enabled Raymond to retire from the lithography business in 1965 at the age of fifty-two. From that point on, the parties lived off of their investments and resided in a Brookfield home, which Raymond had purchased many years before. Theresa was a homemaker and not employed outside of the home until 1972 when she began parttime employment as a babysitter and a substitute nursery school teacher. Aside from the investment income which totaled approximately $8,000 in 1982, the parties each had small monthly incomes, mainly from social security.

The value of the marital estate, including stocks valued at over $100,000 and the homestead valued at over $70,000, totaled just over $200,000. The parties had four automobiles. The newest car was in Theresa's possession, and the other cars were in Raymond's possession. An additional significant asset is the subject of this appeal.

In 1958, Raymond and his brother each inherited one-half interest in some recreational property in Three Lakes, Wisconsin. Raymond bought out his brother's interest in 1968 for approximately $19,500. At the time of the trial, the property was assessed at just over $100,000. It appears that at least some of the funds utilized by Raymond to purchase his brother's interest were derived from inherited property.

Section 767.255, Stats., provides in pertinent part:

Any property shown to have been acquired by either party prior to or during the course of the marriage as a gift, bequest, devise or inheritance or to have been paid for by either party with funds so acquired shall remain the property of such party and may not be subjected to a property division under this section except upon a finding that refusal to divide such property will create a hardship on the other party or on the children of the marriage, and in that event the court may divest the party of such property in a fair and equitable manner.

The trial court decided to include the Three Lakes property in the divisible estate. Alluding to the fifty / fifty split presumed by sec. 767.255, the trial court essentially awarded the savings accounts, stocks and insurance policies to Theresa and the homestead and Three Lakes property to Raymond. The parties kept the cars in their possession. No maintenance or support was awarded.

On appeal, Raymond asserts that the Three Lakes property was improperly included in the estate. He asserts the trial court failed to make a finding of hardship and that such a finding would be against the great weight and clear preponderance of the evidence.

Before considering the merits of the appeal, we must clarify the standard of review. As a general matter, the property division rests in the sound discretion of the trial court, and the division will not be upset absent an abuse of that discretion. Johnson v. Johnson, 78 Wis. 2d 137, 143-44, 254 N.W.2d 198, 202 (1977). The proper exercise of discretion requires "a reasoning process dependent upon facts in, or reasonable inferences from, the record and a Conclusion based on proper legal standards." Holbrook v. Holbrook, 103 Wis. 2d 327, 340, 309 N.W.2d 343, 349 (Ct. App. 1981).

Regarding the more specific determination of "hardship," however, it is at least arguable that the standard of review is not as clear. There is apparently no controlling case authority. *fn1 Moreover, sec. 767.255, Stats., requires the trial court to make a "finding" of hardship if an inheritance is to be included in the marital estate. The use of the word "finding" rather than "Conclusion" can be argued to indicate that the determination of hardship is a factual determination.

We rule otherwise, as we see two problems with saying that "hardship" is a finding of fact. First, hardship is an indefinite concept which will depend upon the circumstances of an individual case. There is an element of flexibility and choice required that cannot be reduced to rules. The choice is not between two conflicting facts or inferences, as in findings of fact. Rather, the choice here is to weigh a variety of considerations in arriving at an equitable and individualized solution. Thus, the very essence of "hardship" is that it is ...

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