§ 13.02 Division of Property at Divorce
| Jurisdiction | United States |
| Publication year | 2021 |
§ 13.02 Division of Property at Divorce
When parties are attempting to agree upon an appropriate property division at divorce, the general parameters governing the division must first be ascertained. One basic determination which should be made initially is the property available for division. In a kitchen sink state119 all property of the parties can be divided, regardless of the time or manner of acquisition. In a marital property120 (or community property)121 state, separate property cannot be divided.122 In addition, some states allow the marital estate to be reimbursed if marital property was spent during marriage to maintain or improve a spouse's separate property.123 Conversely, in some marital property states if a spouse's separate property was used to improve or maintain marital property, or separate property is transmuted into marital property, the separate property contribution is refunded to the contributing spouse's separate estate, and deducted from the divisible marital estate. This practice is called reimbursement,124 special equity,125 or a credit.126
Once the property available for division is determined, it is also important to ascertain the rules governing how the property will be divided. In some community property states, community property must be equally divided between the parties.127 A few states have adopted a rule that an equal division of marital property is presumptively fair, and the divorce court can make a different division only if the particular circumstances warrant.128 The most common type of property division statute, however, merely directs the court to equitably divide the parties' divisible properly. Sometimes the statute contains a number of different factors the court must consider,129 whereas in other instances, no specific considerations are set forth in the statute.130 In these latter states, the courts have often prescribed the factors that should be considered.131
[1]—Factors Affecting the Property Division
All states now have one property division statute that governs all divorces, regardless of the age of the parties, the length of the marriage, or whether the parties had children. The statutes therefore are by necessity quite vague and ambiguous, because it is impossible to set forth one definite set of property division principles that should be applied to all marriages.132 For example, the District of Columbia statute133 provides that divorce courts should consider the following factors:
(1) The duration of the marriage.
(2) Any prior marriage of the parties.
(3) The age of the parties.
(4) The health of the parties.
(5) The occupation and sources of income of the parties.
(6) The assets and debts of the parties.
(7) The needs of the parties.
(8) Whether either spouse will have the custody of minor children.
(9) The opportunity of each spouse to acquire assets in the future.
(10) Whether either spouse will receive alimony.
(11) Each spouse's contribution to the acquisition, preservation, appreciation, dissipation, or depreciation in value of the marital estate.
(12) Each spouse's contribution as a homemaker.
This type of statute merely sets forth the factors that can be relevant when parties divorce. In any divorce, courts must balance these factors.
[a]—Fault
Before 1970, a determination of fault was crucial to the divorce process. A divorce could only be granted if fault on the part of one spouse was established. The fault determination frequently significantly affected the property division made and the amount of alimony awarded. However, most states now have accepted the concept of no-fault divorce.134 A fault determination is no longer necessary. If one or both spouses desire a divorce, a divorce will be granted.
No-fault divorce has been accepted for a number of reasons. When spouses divorce, in reality, both spouses are usually at fault. According to this view, it is unrealistic to ascribe fault to only one spouse. In addition, the fault determination process engendered much hostility between the spouses, thereby undermining any continuing relationship between them. This is particularly undesirable if the spouses have minor children, which necessitates a continuing relationship after divorce. The abolition of interpersonal tort immunity has also affected the need for a consideration of fault in the property division process. Because of this change, outrageous behavior can be punished via a tort remedy, rather than via the divorce property division.
For these reasons, a number of states now prohibit divorce courts from considering fault when making the divorce property division.135 Still, a significant number of states permit divorce courts to consider fault.136
Traditionally fault connoted behavior that contributed to the breakdown of the marriage. Under this analysis objectionable behavior after separation would not be fault,137 although some courts may wish to encourage more responsible behavior by the spouses during separation by considering post-separation actions.
In many cases, fault allegations pertain to physical violence138 and adultery.139 Presumably adultery is only relevant if it occurred before the parties separated.140 If one spouse does not support another dependent spouse or any children while the divorce action is pending, this can constitute fault.141
Fault can also be established if a spouse is a workaholic and not interested in sex,142 or if the spouse drinks excessively.143 Evidence of mental cruelty is also relevant to fault. For example, in one case, the wife "talked to [the husband] like he was dirt, hurt his feelings, made him nervous, refused at times to let him touch her, did little or no housekeeping or cooking . . . and was very extravagant with his money."144
Courts have refused to characterize as fault an interest in hunting145 or a change in church affiliation.146 Merely moving out of the marital home does not constitute fault.147 If both spouses are deemed at fault, it generally will not affect the property division.148 However, a court sometimes balances the gravity of the fault of each spouse. If one is much more at fault, it can affect the property division.149
The effect of fault upon the property division depends upon the outrageousness of the behavior. For example, where the husband stabbed the wife repeatedly, thereby disabling her, the court awarded the wife all of the marital estate.150 In contrast, where the wife had an affair, she was awarded approximately 40% of the marital estate.151
Fault may be becoming a less important factor in the divorce property division process. Some commentators have suggested that "it is fair to conclude that criteria for property distribution . . . have become 'non-fault' oriented, and the current emphasis is on economic factors. . . ."152
[b]—Relative Incomes and Financial Needs of the Spouses
Divorce courts frequently attempt to fashion an award so that neither spouse suffers financial hardship after divorce. This involves a consideration of a number of factors, such as the spouses' incomes,153 needs,154 debts,155 health,156 and separate assets.157 It is also important to consider whether a spouse will have custody of a minor child.158 In addition, the ages159 of the spouses and their respective earning potentials,160 as well as the standard of living during the marriage161 are relevant. Some states consider the income tax ramifications of the property division,162 and whether alimony will be awarded.163
[c]—Contributions of Each Spouse to the Acquisition of the Marital Estate
Many statutes direct divorce courts to consider the relative contributions of each spouse to the acquisition of the marital estate164 on the theory that if one spouse is primarily responsible for the acquisition of the marital estate, this factor should affect the property division. A number of provisions state that a spouse's services as a homemaker should be offset against financial contributions by the other spouse,165 although it is unclear how these services are to be offset by a divorce court.166 Presumably homemaking services would be deemed more important if the spouses have children. Some courts have even been known to consider how often the spouses ate in restaurants.167
If property is acquired while the parties are living separately, this suggests that the non-acquiring spouse did not contribute to its acquisition.168
[d]—Dissipating the Marital Estate
[i]—Rules That Have Evolved in Community Property States: Types of Transactions
In all community property states, unilateral management of community property is the norm. Although all states require joint action in a limited number of transactions, most transactions involving community property may be carried out by one spouse. Because of this, all community property states have realized that some limits need to be placed on a spouse's ability to deal unilaterally with community property.169
[A]—Gifts
All community property states limit a spouse's ability to make unilateral gifts of community property. Some bar all such gifts; some bar only "unreasonable" gifts.170 In connection with the determination of whether a gift is "reasonable," the relationship between the donor and donee is important. A gift to a family member is presumptively appropriate, whereas a gift to a paramour is not.171 If the gift is found to be unauthorized, the non-consenting spouse either can recover the gift from the donee (if the donee is known and the property still in existence)172 or ask the donor spouse to reimburse the community for the value of the gift.173
[B]—Payment of Family Law Obligations Resulting from Prior Relationships
In Texas, if a spouse uses community property to pay a child support obligation relating to a child born before the parties married, this satisfaction of a pre-existing obligation is not perceived to be wrongful.174 Texas cases have extended this rule to cover legal fees incurred during marriage in connection with a...
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