Property Law Outline - Marital Property

  1. Basic Approaches to Division of Marital Property
    1. Community Property (Spanish, French states)
      1. Proceeds of spousal community are split in half.
      2. Community pot
        1. Includes: Property purchased or acquired during the marriage.
        2. Excludes: Property from gift/inheritance, anything each spouse took into the marriage.
      1. NOTE: Sometimes it matters whether the proceeds from something such as stock went into a joint account or a personal account.
    1. Equitable Distribution (East)
      1. Originally:
        1. Upon marriage, the woman became a non-legal entity.
        2. Husband and wife were "one," but husband had control.
          1. Wife had no real property rights.
          1. However husband could not alienate wife's right to survivorship.
      1. Today:
        1. All property (even gifts, bequests, or property from devise or descent) acquired during marriage will be distributed.
          1. Can be contracted around (prenuptial agreement).
          1. Legislature can change (as they did with gifts and inheritances after Painter).
        1. Court looks at several factors to determine how property should be distributed (from Painter v. Painter (p.220):
          1. Respective age, background, and earning ability of the parties;
          1. Duration of the marriage;
          1. Standard of living of the parties during the marriage;
          1. What money or property each brought into the marriage;
          2. Present income of the parties;
          1. Property acquired during the marriage by either or both parties;
          1. Source of acquisition;
          1. Current value and income producing capacity of the property;
          1. Debts and liabilities of the parties to the marriage;
          2. Present mental and physical health of the parties;
          1. Probability of continuing present employment at present earnings or better in the future;
          1. Effect of distribution of assets on ability to pay alimony and child support; AND
          2. Gifts from one spouse to the other during marriage.
        1. Fault is not a factor in determining the equitable distribution.
        2. Property brought to the marriage, and any value it gains during the marriage, remains separate property and does not qualify as an asset for distribution.
        3. Main difference with community property is over gifts and inheritances.
    1. Quasi-Community Property
      1. Occurs when a common law property couple owns land in an equitable distribution state.
    1. NOTE: Courts rarely award something jointly to both spouses in a divorce proceeding.  They want to split the interests because it is unlikely that the divorce is amicable and shared ownership might just provoke more legal battles.
  1. Social Values and Marital Property
    1. Different property laws promotes different values.
      1. Divorce law is all about exit options, and these exit options affect the power relations in marriage.
        1. Note, for example, the traditional role of women being promoted through English CL doctrine regarding dividing marital assets.
      1. Changes how marriage is viewed by society.
        1. Is marriage a community or is it two individuals?
      1. Should prenuptial agreements be encouraged?
        1. One way to encourage prenuptial agreements is through the murkiness of the rule (e.g., the Painter factors), because this makes the outcome less certain.
      1. Should there be a no fault rule, as in Painter?
    1. Income Earning Capacity
      1. Is a very important potential "property," particularly when there are few assets in the marriage.
      1. However, increased earning capacity has to do both with activities before and after the marriage.
        1. This makes splitting difficult.
        1. Also an argument about whether it qualifies as property at all, since it is not fungible, inheritable, etc.
        1. But, it does look like a resource. For example, you can take a loan out against it.
      1. In re Marriage of Graham (p.240)
        1. Wife worked as a flight attendant and paid for husband's advanced education.  Then they got divorced.
        2. Court held that the advanced degree was not property.
        3. NOTE: This was not a very good decision.
          1. Most states don't explicitly consider the professional degree to be the asset, but rather use the increased earning potential as the asset.
            1. NY is only state that explicitly considers a professional degree to be a marital asset.
          1. However, there is an issue with remedies because the court has to make assumptions regarding the spouse's career trajectory.
      1. Professional goodwill counts as property in most states.
        1. Ex: Opera singer's husband trained her and raised the kids and she became a celebrity.  His additions to her professional goodwill might be "part of the pot" in a divorce.
          1. This is directly related to her increased earning capacity.
        1. In CA, the spouse is reimbursed, with interest, for all out-of-pocket expenses related to career advancement.
    1. Prenuptial Agreements
      1. Historically, prenups were disfavored and viewed as encouraging divorce.
      2. Now, however, 20 states have adopted the Unified Premarital Agreement.
        1. Addresses duress, coercion, and unconscionability.
        1. Also addresses disclosure issues:
          1. Spouse has to prove failure to disclose an asset; AND
          1. Also has to prove that the agreement itself is unfair.
      1. Treatment of Prenups
        1. Prenup can be treated as presumptively valid.
          1. This is an individualistic view of marriage.
          2. Marriage is almost like a business decision.
        1. Prenup can be treated as presumptively invalid.
          1. This is a paternalistic approach.
          1. State has to assist because people don't know what they're getting into.
      1. Child Support in Prenups
        1. A spouse is allowed to forego spousal support in the prenup, but is not allowed to forego child support.
        2. This is because the child is not a party to the K.
  1. Variants on Traditional Marriage
    1. Cohabitation
      1. Ex. Marvin v. Marvin (p.261)
        1. Express (allegedly) oral agreement between MM and LM.
        2. MM gave up career to be a housewife.
        3. Court goes through two analyses:
          1. Express agreement
            1. LM says that this should be void for public policy because the consideration was sex.
            1. Court holds that unmarried people can enter express Ks regarding cohabitation.
          1. Implied contract
            1. There is a very high burden of proof to show that an implied K existed.
            1. But, Court accepts this as a potential K even though this case was an express agreement (dicta).
    1. Gay Couples
      1. CA & GA have extended Marvin to include gay couples.
      1. Ex. Baker v. State (Supp)
        1. S. Ct. of VT strikes down ban on marriage licenses for gay couples.
        1. Court notes the property benefits that go along with marriage. Says that these rights are significant, and gov't must have a good reason to deprive them.
        1. Here, legislative justification for only allowing heterosexual couples to marry is that they are promoting procreation and child rearing.
          1. Court says that homosexual couples can and do raise children, so this is not sufficient justification and does not pass the rational basis test.