Family Law: Divorce Property Division Court Considerations - Assignment Example

Divorce Property Division Court Considerations In the case of Hyde v. Hyde1 Lord Penzance defined a marriage as a voluntary union between a man and a woman for life, to the exclusion of all others. However, Section 1 2 provides for exceptions to the case of Hyde v. Hyde, which, if the strict application of the definition of marriage by the Judge Lord Penzance was to be applied strictly, then there would be no Divorces. The section provides for grounds for a divorce, court’s duty to inquire into the merits of the petition and to award decrees accordingly. In most states, all property that was acquired by either of the spouses before they got married is normally considered to be non-marital property. In the same manner, any and all property which is acquired after the couple is married is treated as marital property or property of the marriage. In the case that it is determined that the property is indeed marital property, in most cases the courts are required to ensure an equitable division of the property in question3. In the case of Pam Lewis, and her husband Tony, who had been married for 20 years, but were granted a divorce in November 2012, they agree on most issues of the divorce but the division of the property is the sticking point. It is good to note that the two met when Tony was just starting off his company and that Pam joined in the company right from the onset. She utilized her studied professional skills to play a part in raising the company profile and to its success to such an extent that the company is said to have actually doubled its earnings. She added value to the matrimonial property and did developments to the house. The two have amicably resolved this section of the divorce by agreeing to divide the company so she gets to keep her interior designs side of the company while he keeps the rest. While this is the case they have failed to agree on the rest of the asset division which involves the cottage and their matrimonial home plus the savings. The Matrimonial Causes Act 1973 is to the effect that consideration should be put on the welfare of the children first before anything else is considered. Since the couple has agreed that Pam will have the custody and Tony will send maintenance for their children, she should be allowed to keep the house in which the children should be brought up4. Tony wants the matrimonial home sold and the proceeds divided as with the rest of the property. Pam is the spouse who will remain with the children and wants the matrimonial home to remain for her use and that of the children. She suggests that the investments and savings can be divided in half if Tony is willing to leave the matrimonial home to her. Tony points out that whilst his parents left them money in their wills which enabled them to buy the cottage in Cumbria during the course of his marriage to Pam, Pam herself is, as the only daughter of a famous actress, likely to inherit a considerable fortune within the next few years. Regarding this, Tony cannot insist on selling the house because Pam has an inheritance waiting in a few years because she is from a rich family, all the gifts and any inherited property that any spouse may receive during or before marriage will be separate property, unless it is mixed up the rest of the marital property5. Hoffman states that in most States as a result of no-fault divorce laws, the division of marital property is kept separate from any grounds for divorce. At the same time, most states also consider financial misconduct in the course of the division of the marital property. For instance in the case where one spouse goes through a mid-life crises which leads them to foolishly spend their money then there will be penalties when dividing the marital property (Lester 1990). In the same case if one spouse was having an affair and gave out money to the other man or other woman, then he or she can expect that when it comes to splitting the marital property, they will be penalized. If they are from a "dual-property" state like Missouri for instance, it means that for the purposes of divorce then property is divided into two categories. These are the marital property and non-marital property categories. So we need to consider this before making any decisions and we also need to know what can be defined as marital property and what cannot. Marital Property In the case of White v. White6 the judge while exercising his discretion in regard to section 257, deemed it best that a judge should consider the what he thinks about the facts of a particular case at hand as he makes up his decision, and that he should only depart from equal division if there is a good reason to do so. According to the decision in this case, the financial needs of the complainant and reasonableness, should not be the yardstick to depart from equal division of marital property. Marital property can be defined as all property that has been accrued by either of the spouses within the duration of their marriage. The law in dual property states assumes that all property at the time of divorce is to be considered marital property unless either of the spouses can irrefutably prove that some of the property is not marital property. The rule here is applied to both the real property and to the personal property of the spouses. For the purposes of this law, it does not matter if the property was registered in the names of one spouse or both but so long as it was acquired after the date that the spouses married, the law takes it to be owned equally by both spouses. There are exceptions to this law; in the cases whereby one spouse for example added the names of the other spouse to the deed of a non marital property and then the spouse whose name was added can prove that the other spouse who was the original owner did that with an intention to make a gift or donate, then the court can change the property to be marital property. Non-Marital or Separate Property This refers to every other property that is not marital property and is the property of one spouse only. In the case of such property, it is common practice not to divide the property and have it remain with the spouse who acquired the property. This type of property is usually property that was acquired before the two got married. Another type of non marital property which does not have anything to do with the date that the marriage was made is the property that one spouse may inherit from a relative during the duration of the marriage8.The same applies to gifts received during the course of the marriage from any source including from the other spouse. This gifts and inherited properties are considered to be non marital properties and are not shared out during divorce. There is also a scenario where the spouses sign a prenuptial agreement prior to the marriage. In this case, the agreement identifies what is to be considered as marital property and what is not. In the case of a divorce, then both parties are bound to follow what is laid out in the prenuptial agreement. In the case whereby the couple decided to separate legally and not to divorce out rightly, then the property each acquires after the separation can not be considered to be marital property. However, in the case of divorce settlements, any property acquired in the course of the divorce proceedings up to the date it is shown to be final on the court papers, is considered marital property. That is the date used as a point of reference when splitting up the marital property. Commingled Property The act of commingling property is common in many marriages. It refers to the act of willingly amalgamating non marital property with other marital property in the course of a marriage. A good example can be where a spouse after inheriting some money before marriage decides to use it as a down payment for a house9.Then later he marries and they live in the house together during which time, they pay the mortgage using marital income. This means they have co mingled the property with marital income. This is solved by the application of a fair compensation scheme to the spouse who originally paid for the house before marriage to compensate for the contributions made after the marriage and before the marriage. He is awarded a marital percentage as well as a non marital percentage of the value of the property while the other spouse will only get a marital percentage of the property. In the determination of fair division of property then the courts always have to make certain considerations. These considerations are: the prevailing economic circumstances of the spouses. This is to mean they consider how the spouses are each faring financially10. They also have to take into account what their future looks like in regard to their earning potential. The courts also have to consider what and how much did each spouse contribute towards the purchases or general property acquisitions. The courts also consider the exact value of the non marital property for each spouse as well as whether the spouse squandered marital assets and finally the court considers the custodial arrangements pertaining to the minor children in the event that there are some. From these considerations, a court then issues a property settlement which the court will do trying to be as fair as possible to both spouses. Any marital debt is also apportioned fairly and then offset before awarding the final settlement. Separate property According to McLanahan, Sara and Gary Sandefur, courts assume that all property acquired by a couple after they get officially married is marital property. One has to prove that property is not marital property to get it awarded to them. The principle called "the source of funds rule" is applied to some states which mean that when deciding whether property is marital or separate, a court will first consider who actually footed the bill for the property. All property deemed to be marital is then divided equitably. The rest of the property that is classified as separate is then awarded to the owner and not divided between the spouses11. All one has to do is prove that the spouse did not contribute to the acquisition of the property and that property remains yours. Another aspect considered is if the separate property appreciated in value because your spouse helped pay for it in the course of the marriage probably through comingling. If that is the case, then the property will be shared out in percentages calculated by the court and all spouses are entitled to a share. Factors such as one spouse’s health need to reside in the marital home with the children of the marriage, income earning potential, or even a spouse’s business pension interests are all factors that have to be considered In the case at hand, the cottage that Tony bought with the money he inherited should not be considered as marital property and as she has a big earning potential considering she already has a steady income from her company and is set to inherit a lot from her rich mother, then she has no special needs to warrant an unequal share of the property. Pam has custody of the children on the other hand and needs a place to live in her self and the children. At the same time the matrimonial home is marital property so she deserves the chance to a share of the property. As an obligation, the courts may award the matrimonial home to Pam to live in with her children and then divide the rest of the property equally between the spouses except for the cottage that is co mingled and the court may decide to calculate how much of the money for the purchase was from the marital income and how much was from the inheritance then award percentages for each spouse. An example of a fair settlement can be the case below. Ken and Jan are both primarily in the same financial position now at the end of their marriage as they were before they got married. Both still have their careers and their income potential has not been damaged during the marriages course. In this case, the cause is irrelevant and a fair 50-50 settlement is the best way out. This means that Tony will probably not get his wish of the matrimonial house getting sold especially on the weight that the children are with Pam and they need a house to live in same as she does. Then the rest of the property will be divided equally because it is marital property except in the case of the cottage where they own the property jointly but the cottage was purchased with money from an inheritance windfall so Tony can claim it is comingled and get the bigger percentage of the settlement from the property. Although in the reported cases there is much talk of the need to ensure there is fairness in this area, the problem is that there is no agreement about what fairness means!12 Fairness, like beauty, lies in the eye of the beholder. References Hyde v. Hyde (1866) The Matrimonial Causes Act, 1973 McLanahan, Sara and Gary Sandefur. Growing Up with a Single Parent; What Hurts, What Helps. Cambridge: Harvard University Press, 1994: 82) Hoffman, David A.; Karen T. "Coaching From The Sidelines: Effective Advocacy In Divorce Mediation (1999). Gallagher, Maggie. The Abolition of Marriage (Regnery Publishing, 1996) ISBN 0-89526-464-1 Lester, David. "Time-Series Versus Regional Correlates of Rates of Personal Violence." Death Studies 1990. Stansbury, Carlton D. and Kate A. Neugent Is the Haugan decision functionally obsolete? (Wisconsin Law Journal. February 18, 2008) Read More