Family Property

Question 1

O’Brien v. O’Brien

Answer 1

Facts

Mr. and Mrs. O’Brien got married and then Mr. O’Brien (plaintiff) enrolled in medical school. To pay for their living expenses while Mr. O’Brien was in school, Mrs. O’Brien (defendant) put her education on hold and got a job. She contributed all of her earnings to their living expenses in addition to maintaining the household. After Mr. O’Brien received his medical license he filed for divorce. Together, the O’Briens’ only asset of any value was Mr. O’Brien’s license. In the divorce proceeding, the trial court awarded Mrs. O’Brien part of the estimated value of the medical license. Mr. O’Brien appealed.

Issue

Is a medical license acquired by one spouse during marriage considered marital property subject to equitable distribution?

Holding and Reasoning (Simons, J.)

Yes. A medical license is considered marital property to the extent that it was acquired during the marriage. Marital property is not property as traditionally understood. It is a creature of statute and may encompass things that would ordinarily not be considered property. In determining and making a distribution of marital property, a court considers any direct or indirect contribution made to the acquisition of something of value during the marriage, including professional interests.

Question 2

Dower

Answer 2

the wife had a 1/3 interest in all land acquired by the husband during marriage that couldn’t be inherited by the children, not could it be alienated by the husband without her consent – that she got at his death as a life estate

Only a few states

Question 3

Curtesy

Answer 3

the husband had a life estate in all the land that the wife owned during the marriage after her death if the couple shared a child capable of inheriting, otherwise it went to her family.

only exists in a few states and it’s equalized now

Question 4

Married Women’s Property Acts

Answer 4

This abolished coverture so the wife was able to keep control of her own assets, but didn’t give her rights to the husband’s assets. Furthermore, did little to address the fact that women worked inside the home and men outside. Some states gave woemn rights to earned wages in home, but most granted husband control over such earnings.

Question 5

Separate Property in marriage

Answer 5

property acquired before and during marriage is owned separately; creditors cannot go after the assets of one spouse for the debts of the other spouse

There is still a legal duty of spouses to support each other so a court could order one spouse to share property with the other; but generally courts will keep out of property issues between spouses

Question 6

Seperate Property on Divorce

Answer 6

property will be divided based on equitable distribution which requires considering a number of factors including: (1) economic need including child support, (2) status, (3) rehabilitation, (4) contribution of the parties, and (5) in some states fault. Some states prohibit marital misconduct to be considered

Alimony– if one spouse relied on the other for support the court can order to continue that support, but the modern trend is to use maintenance to wane the spouse off the support and make them independent

Question 7

Seperate Property on Death

Answer 7

1) each spouse can devise their property by will, but many states have a forced share or elective share statute that the surviving spouse will get regardless of the will (usually 1/3-1/2); (2) a spouse may give away their own property while still alive; (3) if no will the state’s intestacy law will kick in – some states will give the entire estate to the spouse and some states will divide it between the spouse and the children

Some states will divide the assets and give the surviving spouse its share; other states will allow the spouse to pick which assets s/he wants for their 1/3-1/2 share

Intestacy statute – it usually has about 8-10 steps and then it will escheat to the state

Question 8

Community Property

Answer 8

Everything acquired before marriage, as well as gifts acquired during marriage, are owned separately; but income acquired during marriage belongs to the community

Income from separate property acquired during marriage will remain separate property in some states, but in other states it will belong to the community

Question 9

Community Property Transmute

Answer 9

spouses can change their property from separate to community and vice versa by written agreement per statute of frauds

Question 10

Community Property Parent Authority

Answer 10

if the husband goes to the bank and says “of course my wife authorizes me” the bank may have valid grounds to rely on this

Question 11

Community Property During Marriage

Answer 11

The community property is owned like a partnership; Most States both spouses must agree in order to encumber the community property; Property owned prior to marriage remains seperate property.

creditor of Individual Spouse

• Some can reach CP.
• Some protect CP, unless both spouses consent.
• Some limit portion reachable.

Question 12

Community Propety on Divorce

Answer 12

Minority of such states give each spouse their own property back and then split the community property equally;

Majority of such states use equitable distribution, but they will still have to decide what property is separate and what belongs to the community

Question 13

Community Property on Death

Answer 13

spouses can dispose of their own separate property and ½ of the community property by will, the rest belongs to the surviving spouse

These states do not generally have forced share laws because the couple owns the community property equally

Question 14

Premarital Agreements

Answer 14

Spouses can alter their property rights by mutual agreement either prior to marriage or during marriage

Old rule: such agreements were void as contrary to public policy; new rule: they are valid provided they were entered into voluntarily because it encourages marriages and avoids bitter divorces

Question 15

Premarital Agreements factors for voluntariness

Answer 15

1. Whether the agreement was demanded shortly before marriage;
2. The relative sophistication of each of the parties; and
3. Whether the challenging party had reasonable time and means to access independent counsel

Question 16

Premarital Agreeements Unconscionable if

Answer 16

majority of states such an agreement would be void if unconscionable

Some states look to see if it is “equitable and fair”

Majority Rule: Determine “unconscionability” or “equitable and fairness” at the time the agreement is made

Substantial Minority Rule: determine this based on circumstances at the time the agreement is enforced

Question 17

Homestead Laws

Answer 17

Almost all states have such laws that protect the interests of surviving spouses and minor children in the family home from the deceased spouse’s creditors

• Some states require the home be registered as a homestead before for the protection to take affect
• Other states allow the court to designate homes as homestead after the fact
• Many states have limits on the value of the home, and if the home is worth more it is sold and the money in excess of what is protected by the law goes to the creditors and the rest goes to the surviving spouse and minor children
• Some states allow owners to designate land as homestead even if there is no surviving spouse or minor children

Question 18

Equitable Distribution of Property Jurisdictional split

Answer 18

Separate property states – all use equitable distribution

Community property states – Majority use equitable distribution; Minority give each spouse their separate property and divide the community property equally

Question 19

1st step to Equitable Distribution of Property

Answer 19

What goes into the pool of marital property? – (in separate property states this doesn’t exist till you get divorce)

This requires first deciding what is property (is a professional license property?)

Some courts will only count property acquired during marriage as ‘marital property’ for purposes of equitable distribution

Other courts will also count property acquired outside of marriage as ‘marital property’ for purposes of equitable distribution

Question 20

2nd step to Equitable Distribution of Property Many Factors

Answer 20

How do you do equitable division? – (in separate property states, and the majority of community property states)

1. The duration of the marriage and prior marriage of either party;
2. The age, heath, station, occupation, amount and sources of income, vocational skills, employability, estate, liabilities, and needs of each of the parties;
3. Custodial provisions;
4. How much maintenance that party is getting (more maintenance, less equitable division);
5. The opportunity of each to earn money in the future;
6. The contribution or dissipation of value of the respective estates
7. The contribution or dissipation of value of the respective estates; and
   1. The contribution of of other spouse to the marriageas a homemaker
   2. extent contributions have facilitated the maintenance of this property
   3. whether or not prop division serves as an alternative to maintenance arrangements

**Court may protect + promote best intersts of children by setting aside portions of estate in a seperate fund or trust for their benefit and support

Question 21

ED of Professional License

Answer 21

Minority Rule: will treat it as property and divide it’s proceeds equitable;

Majority rule: have one spouse re-imbrues the other for her investment and opportunity cost

Question 22

ED of Goodwill

Answer 22

• Most states permit business “goodwill” to be dvided.
• Many Differentiate btwn enterprise and personal good will, only enterprise good will is split.
  
  • SNL star Joe Piscopo, division of celebrity goodwill.
  • Gaskill v. Robbins (oral surgery practice value was mosty in rep of wife, so not divisible).
    *

Question 23

Ed of Family Home

Answer 23

often neither party will have enough resources to pay the other for half its value –

• some courts will give it to whichever spouse is best able to care for the children and not have them pay the other;
• other courts will have the house sold over the objection of both parties; this will depend on (1) the resources of each spouse, (2) the type of house it is – if it’s a simple house or a mansion, and (3) how disruptive it will be for the children to have to move