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anything a greater protection against creditors than the joint tenancy. Competing policies of protecting spouses and tort victims come into sharp conflict where one spouse commits a tort and the issue is whether the tort victim can reach the entire marital asset.12
• Marital Interests
Special forms of ownership, such as the tenancy by the entirety, are only the beginning of the special law of marital property, which intersects with family law. Married co-owners are treated like other co-owners during the period of co-ownership, and married coowners can seek partition or severance of a joint tenancy into a tenancy in common, just like any other co-owners. Property law supplies special rules for married couples on death and divorce. These rules for death and divorce can be modified by prenuptial agreements.
Somewhat controversially, courts are reluctant to supervise the behavior of couples during marriage, adopting a “love it or leave it” approach. This can be because the marriage is a multiplex relationship that is difficult to evaluate from the outside as long as disputes remain in the routine range. (Of course, when there is violence and when couples seek separation or divorce, intervention is called for.) Or it can be an echo of an earlier approach in the common law to defer to the husband’s decision-making during the marriage. At common law (but not in equity), the married couple were considered one entity or unified actor. The nineteenth century saw the passage of the Married Women’s Property Acts in all the states, which for the first time allowed married women to act as owners at common law during marriage.
12.See United States v. Craft, 535 U.S. 274 (2002) (discussing Michigan law but declining to insulate assets held in tenancy by the entirety from claims for federal taxes owed by one spouse).
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The Married Women’s Property Acts and related reforms also changed the implications of marital property law on death. Originally, on the death of the husband, the wife was entitled to dower, which gave her a life estate in one-third of the husband’s real property, regardless of what the will provided for. When the wife predeceased the husband, he would have a right to curtesy, which gave him a life estate in all the real property held by the wife (legally or equitably), again potentially overriding a will that provided for less. Dower and curtesy have now been abolished in all states and replaced with the spousal elective share. This usually gives the surviving spouse the right to elect to take one-third of the deceased spouse’s estate, regardless of what the will says. So if A and B are married, and A dies leaving B $1 out of a $300,000 estate, B can elect to take $100,000.
Aside from the forced share, the other major property issue for married couples is the division of martial property on divorce. Here states can be divided into common law and community property states. Community property is a regime that automatically applies to married couples in certain states, mostly in the West and Southwest, that have Spanish or French law in their backgrounds. Property acquired during the marriage is presumed to be community property, which means that it is subject to fifty-fifty division on divorce. Property belonging to the spouses before the marriage and, in some states, bequests are presumed to be separate but can lose that status if the separate property is sufficiently commingled with martial assets. Property can also be transmuted from separate to community or vice versa by written agreement, but again the presumption is for community property.
Marital property in common law states is subject to equitable division on divorce. Ever since the move to no-fault divorce starting around 1970, fault does not play an official role in property division on divorce. Instead, property division is supposed to reflect a wide variety of contextual factors relating to needs, expectations, and contributions, and is usually but not always limited to the property accumulated by the parties during the marriage. Less emphasis is
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now put on alimony, which was meant to provide a source of income support for a dependent spouse, traditionally the wife.
The distinction between the community property and common law systems of division on divorce presents yet another example of rules versus standards. Community property uses a rule (the fiftyfifty split) with lots of further rules about what counts and does not count as community property. The modern common law approach is the quintessential standard—fair and equitable division based on all the circumstances. It is difficult to know which approach works better and what the criteria would be for deciding what “better” means in this context. An interesting empirical question would be whether the community property rule, being more predictable, facilitates reaching property settlements upon divorce.
Particularly difficult issues in asset division on divorce surround human capital, which often is the largest asset of the spouses. What if the main economic value generated by a marriage is in the form of human capital in one of the spouses? Some statutes and court decisions call for some valuation of professional degrees and career enhancements, but these decisions are all over the lot.13 Administration is not easy because the valuation must occur based on the average person in the spouse’s field (which may be ambiguous, e.g., physician or surgeon), but the degree-holding spouse’s career may work out better or worse than that. A prospective surgeon might break a hand or turn out to lack talent and have to enter a lower-paying specialty. If the court makes the award contingent on the future (by retaining jurisdiction), then the paying spouse may have an incentive not to work hard or to choose a lower-paying but possibly more satisfying occupation or spending time with
13.See, e.g., In re Marriage of Olar, 747 P.2d 676 (Colo. 1987) (en banc) (holding degree not to be martial property subject to division but unfairness from sacrifice of career should be considered in maintenance award); O’Brien v. O’Brien, 489 N.E.2d 712 (N.Y. 1985) (degree is property subject to division under statute).
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family instead.14 What if a doctor claims to prefer a career of writing poetry? If the award is lump sum, what should be the measure? Is it one-half the value of the enhancement of the spouse’s earnings created by the degree (discounted to present value), or should it be the sacrifices of the nondegree spouse plus a reasonable rate of return? How should value attributable to native talent be treated? What risks do spouses take on entering the marriage in order to gain the surplus from marriage, and how do we wind them up when that surplus is largely gone?
Some commentators analogize the splitting of assets on divorce to the winding up of a partnership. Is marriage a partnership, and if so, what are the implications for asset division? Or does seeing the marriage as at least in part an economic partnership commodify marriage (see Chapter 3)?
Finally, a problem on the borderland between property and contract is the question of contracting among nonmarried people as a potential substitute for marriage. When such arrangements are wound up, should the courts enforce the parties’ understanding, to the extent that can be ascertained?15 Or should such couples be denied access to contract law, to channel them into marriage? Recently, the issue has been whether to extend marriage to gay couples, and if so, to what extent marriage itself should be customizable. Marriage has a third-party aspect in that others must respect the relationship and its associated decision-making powers. Emergency medical personnel cannot be expected to figure out an idiosyncratic marriage substitute or customized marriage with respect to medical decision-making authority. Such issues are compounded when the question turns to plural marriage. Marriage has both customized contract and mandatory property-like aspects,
14.See, e.g., Gastineau v. Gastineau, 573 N.Y.S.2d 819 (Sup. Ct., N.Y. Co. 1991) (holding that professional football player wasted marital asset in walking away from professional football contract).
15.Marvin v. Marvin, 557 P.2d 106 (Cal. 1976) (in bank).