Marital Interests
•
Two different systems emerged out of
Medieval Europe
1. The English system: the fundamental
principle has been said to be that H and
W have separate property
– However, English law kept control of the
property in the H.
– At the instant of marriage, the W ceased to
be a legal person.
– At the moment of marriage, the W moved
under her H’s protection (cover) and
became a femme covert.
1
Donald J. Weidner
Marital Interests (cont’d)
• Further aspects of the English system:
– The H and the W were one, and the H was the
one.
– The W lost control of her real property to her H.
– In addition, all her personal property, including her
earnings, became the property of the H
• but for clothes and ornaments—the W’s paraphernalia
– The H’s right to possess all the W’s real property
during the marriage, known as jure uxoris, was
alienable by the H and reachable by his creditors.
2
Donald J. Weidner
Marital Interests (cont’d)
2.
The Continental system of community property:
the fundamental principle is that H and W are a
marital partnership (a “community”) and should
share their acquisitions equally.
The English system has been evolving toward the
Continental system.
In the United States, beginning in 1839, Married
Women’s Property Acts
•
•
–
Removed the disability of marriage (“coverture”) and gave
a married woman, like a single woman, control over all her
property.
•
–
It became her separate property, immune from all the H’s
debts.
Gave the W control of her earnings outside the home.
3
Donald J. Weidner
Convey
SAWADA v. ENDO
T/E
H
Take physical
W
possession
Runs down 
H
H
5 mos.
H is uninsured
motorist
Files suit


Nine days later, Convey(s), for
No consideration
H, W remain in
physical possession
T/E
H
W
H
More pleadings, 2d
suit filed

Record deed five months later
4
Sons of
H,W
(Notice)
Sons of
H,W
Donald J. Weidner
SAWADA v. ENDO (cont’d)
H
Jment awarded against H
W
W Dies ten days
later

 moves to set
aside a
“fraudulent
conveyance.”
H
Sons
of
H,W
Court says it must decide: whether the interest of a spouse in
real property, held in a tenancy by the entirety, is subject to levy
and execution by that spouse’s individual creditors.
To decide this, the court says it must determine the impact on
the tenancy by the entirety of the Hawaii Married Women’s
Property Act.
5
Donald J. Weidner
Sawada v. Endo (cont’d)
• Basic principle: a creditor can reach whatever
interests are voluntarily alienable by the debtor.
• At common law, the H had complete use of all of
the property, in addition to his survivorship right.
– He could alienate his right to possess the entire
property, as well as his survivorship right.
– His interest was subject to the W’s survivorship right.
– The W could not alienate her right of survivorship
without the H’s consent
• Thus her creditors could not reach her right
6
Donald J. Weidner
Sawada v. Endo (cont’d)
• The Married Women’s Property Acts in
general terms provided that a married woman
is able to hold, manage and dispose of real
and personal property as if she were
unmarried.
– The Acts did not mention the tenancy by the
entirety
– Thus leaving it for the courts to determine the
effect of the Acts on the tenancy by the entirety.
• There were four different answers to the
question of the effect of the Acts on the
tenancy by the entirety:
7
Donald J. Weidner
Sawada v. Endo (cont’d)
1. Historical minority rule: do not achieve equality
within this tenancy
– The tenancy by the entirety continued unchanged—
the H has exclusive control and can convey the entire
estate, but subject to the possibility that the W may
become entitled to the whole upon surviving him (no
longer the law anywhere in U.S.A.).
2. Majority rule: achieve equality by
– Giving both H and W equal rights to possession during
marriage but
– Forbid either to alienate the interest without the
consent of the other (neither can alienate anything).
•
Result: a creditor can obtain satisfaction from the entirety
property only if the debt is an obligation of both spouses.
8
Donald J. Weidner
Sawada v. Endo (cont’d)
3. Minority rule: Achieve equality by
–
–
–
Giving the W the same rights the H had. She
gets the right to possess 1/2 , and the right to
alienate this right to possession
each can alienate the right to possession
Dissent says the right result is to elevate the
woman to where the man was
•
don’t take away his right to alienate the right to
possession simply to deny it to the W.
4. Small Minority rule: Achieve equality by
–
Allowing each to alienate the survivorship right
only
9
Donald J. Weidner
Sawada v. Endo (cont’d)
– Problem: the interest subject to levy may not yield
a good price at a forced sale.
– Problem: the purchaser at the sale becomes a
tenant in common with the nondebtor spouse.
• We have seen some of the intra-tenancy problems.
– Problem court notes: if the interest of one spouse
is subject to levy, then a contingent interest as
survivor impairs the marketability of the property
and hence the other spouse’s right to join in a
conveyance that will yield each half of the full
equity.
• In effect making one spouse liable for the debts of the
other
• They are the owners, not merely of equal interests, but of
the entire estate
10
Donald J. Weidner
Sawada v. Endo (cont’d)
• Why does the majority want a grantee
to take free of the claims of the creditor
of one tenant?
– What is the court’s explanation of why “No
unfairness to the creditor is involved here”?
• “If the debt arose prior to the creation of the
estate, the property was not a basis of credit,
and if the debt arose subsequently the creditor
presumably had notice . . . .”
• Further, the creditor could insist on a lien on the
property as a precondition to extending credit.
11
Donald J. Weidner
Sawada v. Endo (cont’d)
– What is your view of the matter “strictly from
the standpoint of public policy”?
• Court said: if it had to make a choice
between the creditor and the family, etc.
• The tenancy by the entirety “is a
convenient mode of protecting a surviving
spouse from inconvenient administration of
the decedent’s estate and from the other’s
improvident debts.”
–Note, too, the Hawaii wrinkle. It is hard
for a family to acquire an estate in fee
simple—it should be protected to them.
12
Donald J. Weidner
Sawada v. Endo (cont’d)
• The majority approach gives incentives to H
and W to acquire the property as tenants by
the entirety.
– May be socially desirable policy
– The tradeoff: Exemption from creditors is
available of the other spouse is given assured
property rights.
– Thus, the majority rule encourages the creation of
marital property controlled by both parties.
• Different slant: it permits a person to
“spendthrift” his own assets
13
Donald J. Weidner
DIVORCE
• English Common Law
– Upon divorce, property remains the property of the
spouse holding title.
• If property was held as tenants in common, they
remained tenants in common
• If property was held as joint tenants, they remained joint
tenants (unities were not disturbed)
– Today, they become tenants in common (presumed
intent)
• If property was held as tenants by the entirety, divorce
severed the entirety and they became tenants in
common (even though 4 unities arguably remained
undisturbed) (presumed intent)
– Subject to alimony (obligation to provide continued
support).
14
Donald J. Weidner
Equitable Division
• Today, the property of the divorcing
parties is subject to “equitable division”
– Local statutes must be considered
– Generally, the statutes give the courts
great discretion.
– However, there is great variation among
the statutes:
• Fault may be considered in some states,
whereas
• Fault must be ignored in others
15
Donald J. Weidner
Equitable Division (cont’d)
• In some states, all property owned by the
spouses may be divided, regardless of the
time and manner of acquisition, whereas
• in other states, only “marital property” may be
divided.
• Marital property is defined in some states to
include property acquired during marriage by
whatever means (including gifts and
inheritances), whereas
• in other states, it only includes property
acquired from the earnings of either spouse
during marriage.
16
Donald J. Weidner
Equitable Division (cont’d)
• Any equitable division is
– Subject to rehabilitative alimony –
• support for a limited period of time until the
spouse can enter a job market and become self
sufficient; and
– Subject to maintenance –
• support for a greater period of time – perhaps
indefinite -- if:
– a spouse lacks sufficient property to provide for the
spouse’s own reasonable needs and is unable to
self-support through appropriate employment, or
– is the custodian of a child whose condition or
circumstances make it appropriate that the custodian
not be required to seek employment outside the
home.
17
Donald J. Weidner
Community Property
• Basic Theory: H and W should share equally
all property acquired by their joint efforts
during marriage.
– The marriage is a community to which both marital
partners contribute.
– The identity of the actual breadwinner makes no
difference.
• There must be equal sharing of
– property acquired by the earnings of either H or W
during marriage;
– income from community property; and
– property acquired by the sale of community
property.
18
Donald J. Weidner
Community Property (cont’d)
– Property owned by either spouse before
marriage is separate property
• as is income from such property.
– Property that, although acquired after
marriage, is acquired by gift, inheritance or
devise after marriage, is also separate
property
• as is income from such property.
– Separate property is subject to the control
of the spouse that owns it.
19
Donald J. Weidner
Community Property (cont’d)
– There is a presumption that all property of a
married couple is community property.
• Careful records as to the source of an acquisition help
rebut the presumption.
– Subject to the power of the court, if circumstances
require it, to reach
• the separate property of a spouse and
• the spouse’s ½ of the community property.
• These rules proceed on the assumption that
we know what “property” is involved.
– We now turn to ask, in the context of a dissolution
of marriage, what is “property?”
20
Donald J. Weidner
IN RE MARRIAGE OF GRAHAM
• Proceeding to dissolve a 6-year marriage.
– Throughout, W was a full-time flight attendant.
– H worked part-time for most of the marriage, but
– for 3 ½ years, concentrated on acquiring a B.S. in
engineering physics and an MBA.
– W contributed 70% of the financial support:
• for family expenses; and
• for H’s education.
– “No marital assets were acquired during the marriage.”
– They together managed an apartment house.
– W did most of the housework and cooked most of the
meals.
– No children were born during the marriage.
21
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• W “makes no claim for maintenance.”
– Should she have made a claim?
• See Fn. 23, p. 406
• Compare Unif. Marriage & Divorce Act 308(a)
• In a marriage dissolution proceeding, does an
MBA constitute marital property subject to
division by the court?
• Statute: “’marital property’ means all property
acquired by either spouse subsequent to the
marriage”
– with certain inapplicable exceptions.
• What is “property?”
– Or, what is “property” within the meaning of the
Colorado Dissolution of Marriage Act?
22
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• Trial Court: “an ‘education’ obtained by one
spouse during a marriage is jointly-owned
property to which the other spouse has a
property right.”
• Intermediate Appellate Court reversed, saying
that the value of an education is recognizable
such that it will be taken into account
– in determining maintenance, or
– in arriving at an equitable division of property.
• However, it is not recognizable to the extent it
will be considered “property.”
• Supreme Court affirms the reversal.
23
Donald J. Weidner
In Re Marriage of Graham (cont’d)
Does the statute tell you whether this should be
marital property?
• What is the broadest definition of “property”
used by the court?
– Perhaps: “It embraces anything and everything
which may belong to a man and in the ownership
of which he has a right to be protected by law.”
• Court prefers a more narrow definition
– “everything that has an exchangeable value or
which goes to make up wealth or estate.”
24
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• Supreme Court concludes an MBA is not
“property” because:
– It has no exchange value or any objective
transferable value on an open market
– It is personal to the holder
– It terminates on the death of the holder and is not
inheritable
– It cannot be assigned, sold, transferred, conveyed
or pledged
– “It is simply an intellectual achievement that may
potentially assist in the future acquisition of
property.”
25
Donald J. Weidner
In re Marriage of Graham (cont’d)
• However, the M.B.A.
– Increases your credit rating
– Supports increased tort award
– Can be considered in dividing marital
property
• There was none claimed here (other than the
degree or the increased earning capacity)
– Can be considered if the other spouse is
seeking maintenance
• There was none (that could be) claimed here.
26
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• Can you counter the statement that there is no
“property” because the MBA degree does not have
an exchange value or any objective transferable
value on the open market?
– There are many property rights that have economic value
even though there is no market for them
• For example, the subdivision restrictions preventing my neighbor
from building to my property line
• Or my easement to use my neighbor’s boat ramp
– There are other property rights that have subjective value
even though they have no objective economic value
• For example, my daughter’s drawings I have hanging in my office
at home
• Or the rocking chair mentioned in one of the partition cases.
27
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• Can you counter the statement that there is
no property because the degree (or the
enhanced earning potential) terminates on
the death of the holder and is not inheritable?
– Property can exist even though it is not
transmissible at death
•
•
•
•
Life estate
Contingent remainder
Annuity
Pension rights that are not inheritable (some are)
28
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• Can you counter the statement that there is
no property because the degree cannot be
assigned, sold, transferred, conveyed or
pledged?
– “Property” can exist in other contexts even though
it cannot be transferred
• The right to personal lifetime use of a thing, such as a
non-assignable easement or profit
– Ex., my right to use my neighbor’s boat ramp
• The right to be a tenant in a housing co-operative
– neither the lease nor the stock is assignable without
consent.
• An income interest in a spendthrift trust
• Non-assignable pension rights
• The right to occupy a rent-controlled apartment
29
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• Can you counter the statement that the
degree is not property because it is personal
to the holder?
– Earlier case had held that the accrued goodwill of
a medical practice was not property because it
was based on the physician’s personal skill,
reputation and experience.
– Supreme Court in Graham seems to focus on the
“personal achievement.”
• Is it both an achievement and something short of an
achievement—that is, you need to add more (future
personal services) to get income?
• Is that saying something different than that it
is non-transferable?
• Is it also personal in the sense that a contrary
decision results in the possibility of a
restriction on personal autonomy?
30
Donald J. Weidner
In re Marriage of Graham (cont’d)
• Note: There is an analogous question
under the federal income tax law: What
is “income?”
• One classic case states it is an
– Enhancement in wealth, which is
– Clearly realized, and
– Over which the taxpayer has complete
dominion
31
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• A default rule in this area ought to consider the
expectations of the parties.
• What do you think the expectations of the parties
were?
– Did they expect their joint expenditures of time and money to
produce an asset bringing financial rewards to both of them?
• What if there had been an understanding about the next
investment (ex., her turn for an MBA)?
– Over what time period did they expect those rewards?
• Should they be required to consider the possibility of divorce?
• Do the expectations change over time?
– Is marriage more analogous to an evolving, long-term
contractual relationship rather than a fixed, one-time
contractual exchange?
• Is there an expectation of a share of future profits?
– For how long?
– Does the length of the marriage matter?
32
Donald J. Weidner
In Re Marriage of Graham (cont’d)
• How did the trial court value this “property”?
– MBA holder makes $178,000 more than BA holder
over the holder’s lifetime
– The present value of this $178,000 income stream
is $82,836
• How did the court determine W’s share of this
present value?
– W was held entitled to 40% of the $82,836 present
value, or $33,134.
– Where did the 40% come from and what other
share might have been computed?
33
Donald J. Weidner
Dennis worked
Dennis worked
Ann worked
40 hrs/wk at school
20 hrs/wk at part time job
40 hrs/wk at airline
100
Theory: She worked 40% of the 100 hours per week that
were worked.
-How might you determine a different share?
-Do you consider the hours she worked inside the home?
-Do you consider that she contributed 70% of the
financial support?
-Having determined her share of the present value was
$33,134, how did the trial court direct payment?
-$100mo. X 12 mos./yr. X 27.5 yrs.= $33,000.
34
Donald J. Weidner
Reimbursement Alimony-Mahoney v. Mahoney p. 407
• Mahoney v. Mahoney says a professional
(M.B.A.) degree is not marital property
– The idea of a spousal investment in human capital
demeans the institution of marriage.
– How much it adds to income is too speculative to
value.
• Speculative about what you are likely to make as the holder of
an M.B.A., and
• Speculative about what you would have likely made without it.
– Property acquired during marriage is what may be
divided,
• not property that will not be acquired until after the marriage.
35
Donald J. Weidner
Mahoney v. Mahoney (cont’d)
– A property distribution award is much more
final than an award of alimony,
• alimony can be adjusted to reflect unanticipated
changes in the circumstances of the parties.
– Treating general enhanced earning
possibilities as property is unfair to
• The unsuccessful professional, and to
• The professional who decides not to use the
profession, or not to use it to maximize income.
36
Donald J. Weidner
Mahoney v. Mahoney (cont’d)
•
•
Instead, the court ordered “reimbursement
alimony”
Unlike Graham, recovery is available under
this theory even if
1. there is no other marital property to distribute,
and
2. permanent alimony is not appropriate.
•
Court was not entirely comfortable going
even so far as the reimbursement remedy:
–
“This Court does not support reimbursement
between former spouses in alimony proceedings
as a general principle. Marriage is not a
business arrangement in which the parties keep
track of debits and credits, their accounts to be
settled upon divorce.”
37
Donald J. Weidner
Mahoney v. Mahoney (cont’d)
• Reimbursement alimony should cover all
financial contributions towards the former
spouse’s education, including
– household expenses
– educational costs
• including school travel expenses, and
– any other contributions used by the supported spouse
in obtaining his or her degree or license.
• At least if mutual benefit was expected:
– “Only monetary contributions made with the mutual
and shared expectations that both parties to the
marriage will derive increased income and material
benefits should be a basis for such an award.”
38
Donald J. Weidner
Mahoney v. Mahoney (cont’d)
• Reimbursement alimony is restitution that
– does not give the recipient the benefit of any
appreciation on her investment
• Could not interest be awarded to give at least some
return on investment?
– does not reimburse the recipient the opportunity
cost of getting a degree.
• However, it avoids many of the difficulties
involved in a “marital property” approach that
would value future earnings, such as:
– Taking into account possible career changes;
– Taking into account that, over time, the relative
value of the degree increases as the value of job
experience and goodwill increases.
39
Donald J. Weidner
Reimbursement Alimony (cont’d)
• Do you reimburse out-of-pocket costs or do you also
reimburse opportunity costs? For example, if:
Out-of-pocket cost of JD is
$ 60,000
JD student foregone salary for 3-years
75,000
Total Cost $ 135,000
• Does the $135,000 equal “the cost of the investment
in expected future earnings attributable to the law
degree”?
• The reimbursement remedy arguably reflects the
reality that the non degree-earning spouse has
agreed to a reduced standard of living for the period
of the paying of the costs of the education.
– Mahoney: “She has postponed . . . present consumption
and a higher standard of living, for the future prospect of
greater support and material benefits.”
40
Donald J. Weidner
Reimbursement Alimony (cont’d)
• Some would say that reimbursement alimony
is a preferable solution to valuing the degree
(or the enhanced earning potential it
represents) because of the difficulty of
valuation of the potential.
• Other reasons for avoiding the valuation of
the increased earning potential:
– The potential may never be realized
– If the spouse with increased earning potential is
required to share it as part of the marital property
when it accrues during a first marriage, that
spouse will again be required to share it as marital
property when it is earned and paid during a
second marriage.
• In effect, the degree earning spouse must account for it
under both an accrual method and under a cash method
41
Donald J. Weidner
Reimbursement Alimony (cont’d)
• As to the specifics of the reimbursement
alimony, consider the use of opportunity
costs.
– If this were a partnership, opportunity
costs would not be taken into account
– Nor would they appear on a partnership
balance sheet
– They are also speculative
42
Donald J. Weidner
O’BRIEN v. O’BRIEN (p. 407)
• A third, and minority approach.
• New York court dealt with the question whether a
husband’s medical license constituted marital
property within the meaning of the state’s equitable
distribution law.
• How did the court decide “that an interest in a
profession or professional career potential is marital
property”?
• O’Brien explicitly rejected the argument that
reimbursement was an adequate remedy. Why?
– Note the analogy: like recovering only the down payment on
a house.
• Do you agree that the italicized words at pp. 407-408
“mean exactly what they say”?
43
Donald J. Weidner
O’Brien v. O’Brien (cont’d)
• N.Y. statute provided that, in making an
equitable distribution of marital property,
– “the court shall consider: . . . (6) any equitable
claim to, interest in, or direct or indirect
contribution made to the marital property by the
party not having title, including joint efforts and
expenditures and contributions and services as
a spouse, parent, wage earner and homemaker,
and to the career or career potential of the other
party [and] . . . (9) the impossibility or difficulty of
evaluating any component asset or any interest
in a business, corporation or
profession.”[Emphasis added)
44
Donald J. Weidner
O’Brien v. O’Brien (cont’d)
• “The Legislature has decided . . . that these
contributions represent investments in the
economic partnership of the marriage and
that the product of . . . the joint efforts, the
professional license, should be considered
marital property.”
• Is there an argument that there was a more
modest intent?
– Consider what Subsec. 6 would do to the trial
court’s decision in Graham.
• Might Subsec. 9 have had a contrary intent?
45
Donald J. Weidner
O’Brien v. O’Brien (cont’d)
• An economist sees wealth enhancements as
spent either on savings or on consumption.
– What is money spent on an education?
• O’Brien is said to adopt a theory of spousal
investment in human capital.
• Concept: during the marriage, the H and W
combine earning power through the division
of labor in a way that maximizes total utility in
the provision of consumption and savings.
– Savings are invested in a variety of assets,
including human capital.
• If the marriage lasts, both will share in the
future earnings.
46
Donald J. Weidner
O’Brien v. O’Brien (cont’d)
• If the marriage is dissolved, the savings
accounts (including the account in human
capital) are divided so that each receives an
equal share of the increase in future
consumption that resulted from limiting
present consumption during the marriage.
• The authors conclude:
– “The remedy adopted by O’Brien is similar to a
damages remedy. When one party breaches a
contract to furnish goods, the other party can
recover damages in the amount required to pay
for substitute goods (to pay for an ordinary
investment in place of human capital).”
47
Donald J. Weidner
Credits to Capital Accounts
• Contribution of money
• Contribution of property
• Profits
– Including profits that are calculated when assets
are “marked [up] to market” at dissolution
• No increases for contribution of services
• No presumption of compensation for services
apart from share of profits
48
Donald J. Weidner
Debits from Capital Accounts
• Distributions of money
• Distributions of property
• Losses
– Including losses that are calculated when
assets are “marked [down] to market” at
dissolution
• No debits for wasted time
49
Donald J. Weidner
Balance Sheets
With respect to profits and losses, mark assets to market when you divide up the proceeds on
Dissolution. Presumptive rule: Equal Sharing.
Assets
=
Liabilities
0
100 Bldg.
+
Equity
100 Mach.
A
B
100 (bldg) 100 (mach)
On liquidation, if bldg. Is sold for $200 – the $100 gain is allocated equally.
Assets
=
Liabilities
0
200 cash
+
Equity
100 mach.
If the $100 machine is sold for $80, the $20 loss is allocated equally.
50
A
B
A
B
150
150
Donald J. Weidner
Elkus v. Elkus
• Dissolution of a 17-year marriage.
• Prior to marriage, Frederica was early in her
career, performing minor roles with the Met
– In the first year of the marriage, she earned
$2,250
• Her career rose dramatically during the 17year marriage.
– In a final year, she earned $621,878
•
•
•
•
H traveled the world with her.
H coached her for 10 years.
H photographed her for album covers, media
H says he sacrificed his career for
– her career, and
– the lives of their young children
51
Donald J. Weidner
Elkus v. Elkus (cont’d)
• Is there “property?”
• If there is property, is it marital property?
• What is the asset that is allegedly
– property
– that has appreciated and
– that belongs to the marital partnership?
• She argues there are fewer sticks in the
bundle than in the case of a profession
– no degree
– no license
• She also argues that, if there were an asset,
she had it prior to the marriage.
52
Donald J. Weidner
ELKUS v. ELKUS (cont’d)
• H argues that he is entitled to equitable
distribution of her “career and/or celebrity
status.”
• Court seems to suggest that both the skills
and the personality are assets.
• Brings appreciation center stage.
• Arguably goes beyond O’Brien in at least
two ways:
– No professional degree is involved
– Her career, if it were an asset, is something
she acquired prior to the marriage
53
Donald J. Weidner
ELKUS v. ELKUS (cont’d)
• Statute says, in making an equitable
distribution of marital property,
– “the court shall consider . . . (6) any equitable
claim to, or interest in, or direct or indirect
contribution made to the marital property by
the party not having title, including joint efforts
or expenditures and contributions and
services as a spouse, parent, wage earner
and homemaker, and to the career or career
potential of the other party [and] . . . (9) the
impossibility or difficulty of evaluating any
component asset or any interest in a
business, corporation or profession.”
54
Donald J. Weidner
Elkus v. Elkus (cont’d)
• Court: “By broadly defining the term ‘marital
property,’ [the statute] intended to give effect
to the ‘economic partnership’ concept of the
marriage relationship.”
• Does the quoted portion of the statute define
“marital property”?
• Does it use the word partnership?
• Does the statute say an interest in a
profession or professional career is marital
property?
55
Donald J. Weidner
Elkus v. Elkus (cont’d)
• Is the concept of partnership fully
implemented?
– “[T]o the extent the [H’s] contributions and
efforts led to an increase in the value of the
[W’s] career, this appreciation was a
product of the marital partnership, and,
therefore, marital property subject to
equitable distribution.”
– H recovers only “to the extent [H’s]
contributions to [her] career were direct
and concrete, going far beyond child care
and the like.”
56
Donald J. Weidner
Elkus v. Elkus (cont’d)
• Note also: the idea of an equitable
distribution, in itself, is somewhat inconsistent
with a partnership analogy.
– Arguably, it is easier to find a marital partnership
asset if it will be apportioned according to
equitable principles.
• Note the further discussion in Elkus of an
additional provision of the NY Statute ( p.
411):
– “where equitable distribution of marital property is
appropriate, but ‘the distribution of an interest in a
business, corporation or profession would be
contrary to law,’ the court shall make a distributive
award in lieu of an actual distribution of the
property” (not quoting the statute for the last part).
57
Donald J. Weidner
Elkus v. Elkus (cont’d)
• “The enhanced skills of an artist . . . , although
growing from an innate talent, which have
enabled her to become an exceptional earner,
may be valued as marital property subject to
equitable distribution.”
• An increase in value of separate property,
occurring during the marriage and due to
contributions of the other spouse, including
homemaking, should be considered marital
property.
• In constructing the partnership balance sheet:
58
Donald J. Weidner
More on the Partnership Analogy
• RUPA 401(b): “Each partner is entitled to an
equal share of the partnership profits and is
chargeable with a share of the partnership
losses in the same proportion to the partner’s
share of the profits.”
• RUPA 401(h): “A partner is not entitled to
remuneration for services performed for the
partnership, except for reasonable
compensation for services rendered in
winding up the business of the partnership.”
59
Donald J. Weidner
Gastineau v. Gastineau
• W files for divorce from pro-football
player Marc
• Marc had a contract with the New York
Jets to play 16 games for $775,000
($48,437 a game)
• After playing 6 games, Marc broke his
contract and forfeited $484,375 for the
next 10 games.
• Held: he dissipated a marital asset, and
still owed W her 1/3 share of it.
60
Donald J. Weidner
Contracts Between Spouses
•
•
In some European and Latin American
countries, spouses must elect, at the time
they marry, a marital property regime.
Three options are usually available:
1. Hold all property in separate ownership (as
under the English common law).
2. Hold property acquired from earnings as
community property, but inherited property or
gifts as separate property (as under the United
States community property system).
3. Hold all property from whatever source as
community property (“universal community
property”).
61
Donald J. Weidner
Contracts Between Spouses
• In the USA, these 3 options have been
available in community property states,
which have permitted to parties to
contract.
• They have been less readily available in
states basing their marital property rules
on the English common law.
– Antenuptial agreements attempting to limit
the duty of support on divorce have, until
recently, been held invalid
• as providing too much incentive for divorce
62
Donald J. Weidner
Contracts Between Spouses
1. A growing number of cases hold that antenuptial
agreements dividing property on divorce are
valid, provided:
– The “agreement is fair and reasonable or—or perhaps
and”
– it is based on full knowledge of each other’s property.
(text p. 415)
2. Uniform Act (adopted in about 1/3 of states)
provides--antenuptial property agreements will be
enforced provided:
– There was sufficient disclosure of wealth; and
– The agreement was not unconscionable when made.
3. Are 1 and 2 any different?
63
Donald J. Weidner
MARVIN v. MARVIN (p. 427)
•
•
•
•
•
M was an actor
F was an entertainer and singer
M, F lived together for 7 years w/o marrying.
All property acquired during the 7-year
period ($1 million +) was taken in the name
of M.
On breakup, F asserted oral agreements:
1. An initial agreement that they would
•
•
•
Share equally all property accumulated as a result of
their efforts, individual or combined
They would hold themselves out as married
She would render her services as companion and cook
2. A subsequent agreement
•
•
She would give up her lucrative career to devote fulltime to M
M would support F for the rest of her life
64
Donald J. Weidner
Marvin v. Marvin (cont’d)
• Prior to Marvin v. Marvin, contracts between
unmarried couples, living together, with respect
to sharing their property, were held void as
agreements made in consideration of illicit
cohabitation.
• In a famous opinion, the California Supreme
Court declared:
1. Courts should enforce express contracts between
non-marital partners except to the extent that the
contract is explicitly founded on the consideration of
meretricious sexual services
65
Donald J. Weidner
Marvin v. Marvin (cont’d)
2. In absence of express contract, courts should
examine the parties conduct for an:
•
•
•
Implied contract;
Agreement of partnership; or
Some other tacit understanding
3. The courts may employ the doctrine of quantum
meruit or equitable remedies such as
constructive or resulting trusts, when warranted.
–
Quantum meruit—as much as deserved—implied
contract to pay reasonable compensation for services.
4. There is no more reason to presume that
services are transferred as a gift than there is to
presume that property is transferred as a gift.
66
Donald J. Weidner
Marvin v. Marvin (cont’d)
• What of the argument that courts should
not treat unmarried people as if they
were married?
– “We need not treat nonmarital partners as
putatively married persons in order to apply
principles of implied contract, or extend
equitable remedies; we need to treat them
only as we do any other unmarried
persons.”
– Don’t deny them the right to enforce their
contracts or property rights simply because
they have had sexual relations outside of
marriage.
67
Donald J. Weidner
Marvin v. Marvin (Cont’d)
• What of the argument that this case shows
disrespect for marriage?
– Court says this decision removes an incentive to
stay single:
• [[D]enying the homemaking partner any relief] was
calculated to cause the income producing partner to
avoid marriage and thus retain the benefit of all of his or
her accumulated earnings.”
• On remand, the trial court found:
– No contract was proven, but
– Awarded her 2 years of her highest salary as a
matter of equity.
• On further appeal, the equitable award was
reversed as without foundation in law.
68
Donald J. Weidner
Some Different Views from Marvin v. Marvin
• Some have refused to enforce even express
contracts, stating that
– enforcement would be inconsistent with legislative
abolition of common-law marriage, or that
– a change as sweeping as Marvin v. Marvin is for the
legislature, not the courts.
• Some have said that, although express
contracts are enforceable, contracts between
unmarried cohabitants will not be implied
– because too amorphous to support equitable
enforcement, and
– because inconsistent with the policy abolishing
common-law marriage.
69
Donald J. Weidner
Alternative Views to Marvin (cont’d)
• Washington courts have said that,
where there is a marriage-like
relationship of significant duration, upon
dissolution of the relationship there is a
presumption of joint ownership of
property that could have been
characterized as community property
had they been married.
70
Donald J. Weidner
FLORIDA SEQUEL TO MARVIN
v. MARVIN
• It does not violate public policy to enforce an
express contract between unmarried
cohabitants to divide their property as if they
were marital partners
• There will be no implied contract from
cohabitating as married
– To imply such a contract from the simple fact of
cohabitation would conflict with the legislative
elimination of common-law marriage.
• No quantum meruit recovery is available if
there is an express contract
71
Donald J. Weidner
Baker v. State
• “Plaintiffs are three same-sex couples
who have lived together in committed
relationships for periods ranging from
four to twenty-five years.”
– Two of the couples raised children
together.
• Each couple applied for and was denied
a marriage license.
• The couples argued the denials were
unconstitutional under the “Common
Benefits Clause” of the Vermont
Constitution.
72
Donald J. Weidner
Baker v. State (cont’d)
• The “Common Benefits Clause:”
– “That government is, or ought to be, instituted for
the common benefit, protection, and security of the
people, nation, or community, and not for the
particular emolument or advantage of any single
person, family, or set of persons, who are a part
only of that community . . . .”
• Trial court: no constitutional violation
because the marriage statutes rationally
further the State’s interest in promoting “the
link between procreation and child rearing.”
• Vermont Supreme Court asks: “May the
State of Vermont exclude same-sex couples
from the benefits and protections that its laws
provide to opposite-sex
married couples?”Donald J. Weidner
73
Baker v. State (cont’d)
•
Supreme Court says 3 prongs to a
“Common Benefits” challenge:
1. Identify the part of the community that is
being excluded.
2. Identify the governmental purpose in
“drawing a classification that includes
some members . . . but excludes others.”
3. Determine whether the classification is
“reasonably necessary” to accomplish the
State’s claimed objectives.
74
Donald J. Weidner
Baker v. State (cont’d)
•
To determine whether the omission is
reasonably necessary, consider at
least:
1. the significance of the benefits and
protections;
2. whether the omission promotes the
government’s stated goals; and
3. whether the classification is significantly
underinclusive or overinclusive.
75
Donald J. Weidner
Baker v. State (cont’d)
•
Benefits and protections incident to a
marriage license in Vermont:
1. the right to receive a portion of the estate of a
spouse who dies intestate;
2. protection against disinheritance through
elective share provisions;
3. preference in being appointed as the personal
representative of a spouse who dies intestate;
4. the right to bring a lawsuit for the wrongful death
of a spouse;
5. the right to bring a lawsuit for loss of consortium;
6. the right to workers’ compensation survivor
benefits;
7. the right to spousal benefits statutorily
guaranteed to state employees;
76
Donald J. Weidner
Baker v. State (cont’d)
• Vermont benefits and protections incident to
marriage (cont’d)
– 8. the opportunity to be covered as a spouse under
group life insurance policies issued to an employee;
– 9. the opportunity to be covered as the insured’s
spouse under an individual health policy;
– 10. the right to claim an evidentiary privilege for
marital communication;
– 11. homestead rights and protections;
– 12. the presumption of joint ownership of property
and concomitant right of survivorship;
– 13. hospital visitation and other rights incident to
medical treatment of a family member; and
– 14. the right to receive, and the obligation to
provide, spousal support, maintenance, and property
division in the event of separation or divorce.
77
Donald J. Weidner
Baker v. State (cont’d)
•
Some federal benefits flowing from the
marriage relation (not mentioned by
the court):
1. social security benefits as a spouse;
2. income tax benefits (ability to split
income);
3. estate tax benefits (the marital
deduction); and
4. welfare benefits.
78
Donald J. Weidner
Baker v. State (cont’d)
• If the purpose of the exclusion is to
further the link between procreation and
child-rearing, it is “significantly
underinclusive”
– it does not exclude same-sex couples who
do not intend to have children; and
– it does not exclude same-sex couples who
are not capable of having children.
79
Donald J. Weidner
Baker v. State (cont’d)
• On the other hand, the exclusion is
overinclusive
– many children are being raised by same-sex
couples;
– many same-sex couples are conceiving of children
using reproductive technologies; and
– state legislation now permits the same-sex partner
of a biological parent to legally adopt in certain
circumstances.
80
Donald J. Weidner
Baker v. State (cont’d)
• The State “is constitutionally required to
extend to same-sex couples the common
benefits and protections that flow from
marriage under Vermont law.”
• This may take any one of several forms:
– Inclusion within the marriage laws themselves;
– A parallel “domestic partnership” system; or
– Some equivalent statutory alternative.
81
Donald J. Weidner
Legislative Response to Baker v.
State
• The year after Baker v. State, the Vermont
legislature enacted a statute authorizing
same-sex couples to enter into a “civil union.”
• The parties to a civil union “shall have all the
same benefits, protections and
responsibilities under law, whether they
derive from statute, administrative or court
rule, policy, common law or any other source
of civil law, as are granted to spouses in a
marriage.”
82
Donald J. Weidner
Defense of Marriage Act
• Enacted by Congress in 1996 in reaction to an
Hawaii court decision recognizing same-sex marriage
– the Hawaii court said the exclusion was sex-based
discrimination in violation of the equal protection clause of
the Hawaii constitution.
– the Hawaii decision was subsequently reversed by a state
constitutional amendment
• Section 2 of DOMA provides that no state shall be
required to give effect to a same-sex marriage
contracted in another state.
– The traditional conflict of laws rule is that a marriage is valid
everywhere if it is valid under the law of the state where it
was contracted.
83
Donald J. Weidner
Defense of Marriage Act (cont’d)
– Some states have an exception: it will not be
recognized if it “violates the strong public policy of
another state which had the most significant
relationship to the spouses and the marriage at
the time of the marriage.”
• However: The full faith and credit clause of
the federal constitution obliges state courts to
give full faith and credit to the public acts,
records, and judicial proceedings of every
other state.
• In addition, there is a question of the
operation of the equal protection clause.
– Some have argued that Baker v. State’s principle
of inclusion should apply to the equal protection
clause
84
Donald J. Weidner
Defense of Marriage Act (cont’d)
• Section 3 of the DOMA provides that
– for all purposes of federal law,
– “the word ‘marriage’ means only a legal
union between one man and one woman
as husband and wife, and
– the word ‘spouse’ refers only to a person of
the opposite sex who is a husband or a
wife.”
85
Donald J. Weidner
Defense of Marriage Act (cont’d)
• Section 3 of DOMA deprives same-sex
married couples of social security, tax, and
welfare benefits of federal law.
– Raising, especially if their marriages are
recognized by a state, equal protection issues.
– Note: traditionally, state law determines sex
classification.
• States now differ on whether birth certificates can be
changed after “sex reassignment surgery”
• Raises “dual citizenship” issues analogous to
those in Dred Scott.
– See Memorandum on Discrimination Cases
86
Donald J. Weidner
Opinions of the Justices to the
Senate (February 3, 2004)
• Advisory opinion on bill that says it is the
“public policy” of the Commonwealth of Mass.
that “spouses of a civil union” “shall have all
the benefits, protections, rights and
responsibilities afforded by the marriage laws
. . . .” “Marriage” is exclusively reserved for
opposite-sex couples.
• There are tangible benefits and intangible
benefits to marriage.
• Making only tangible benefits available is not
enough.
87
Donald J. Weidner
Opinions of the Justices (cont’d)
• “[T]he traditional, historic nature and meaning of
civil marriage in Massachusetts is as a wholly
secular and dynamic legal institution, the
governmental aim of which is to encourage stable
adult relationships for the good of the individual
and of the community, especially its children. The
very nature and purpose of civil marriage . . .
renders unconstitutional any attempt to ban all
same-sex couples, as same-sex couples, from
entering into a civil marriage.”
• “The history of our nation has demonstrated that
separate is seldom, if ever, equal.”
– The bill would maintain a “stigma of exclusion.”
88
Donald J. Weidner
Opinions of the Justices (cont’d)
• See also the Supreme Court of Canada’s
1999 decision striking down a definition of
“spouse” as a person of the opposite sex.
– The Canadian Charter of Rights and Freedoms
invalidates a law with the “effect of perpetuating or
promoting the view that the [gay or lesbian]
individual is less capable or worthy of recognition
or value as a human being or as a member of
Canadian Society, equally deserving of concern,
respect, and consideration . . . .”
89
Donald J. Weidner
Migrating Same-Sex Partners
• Assume that two same-sex partners living in
Hawaii register as “reciprocal beneficiaries”
entitled to take title as tenants by the
entirety.
– In Hawaii, a tenancy by the entirety may be
taken in personal property.
• Assume they purchase stock as tenants by
the entireties and subsequently move to a
state that recognizes the tenancy by the
entirety in personalty.
– Will that state recognize the stock as held by
them as tenants by the entirety?
90
Donald J. Weidner
Migrating Same-Sex Partners
(cont’d)
• Analogy: Whether property is characterized
in accord with the community property system
or in accord with the common law property
system depends upon the domicile of the
spouses when the property is acquired.
• Once the property has been initially
characterized, the ownership does not
change when the parties change their
domicile
– unless both parties consent to the change in
ownership.
91
Donald J. Weidner