Pre-Nuptial Agreements, community property, and same-sex marriage

Dividing assets during divorce

Dividing assets during divorce

I don’t generally read the “Dear Abbey” column in the news but today it caught my attention and I believe even in my limited reading of the Dear Abbey’s advice column that this time she gave the worst advice in the world.  In fact, this advice was so bad, she should be immediately and permanently banished to the archives.

Basically a man wrote expressing his consternation at his wife of 40 years, who has never worked outside the home, and for the past 20 years lives in a separate bedroom, complete with her own bath and living area that is so filthy it “stinks to the high heavens”.  This man apparently earns a good living; evidenced by the fact they live in a large home in a good neighborhood in San Diego, CA.  He reports he is up to his eyeballs in debt support ing his 300 pound wife’s spending habits, while she does nothing and he subsist on take-out, frozen dinners, and cleans the house himself (all except the bedroom and living area where his slob of a wife resides).

The man, who has lived in this situation for the majority of his life does not believe in Divorce, and reports he cannot afford one, also states that his wife refuses counseling saying she has no problem.  Whereby, Dear Abbey responds to the man that if his wife is happy in this situation, she has no problem; he does.  Dear Abbey’s response is ludicrous in that it is no different than saying a man or woman married to a drug addict is to blame when the addict refuses to admit he/she has a problem.

Believe it or not, this blog is not about Dear Abbey, nor her illogical suggestion that the spouse who suffers is the one with a problem, rather, this man’s situation is a prime example of community property theory gone awry.  California subscribes to both community property and alimony which I surmise is the reason this man cannot afford a divorce.  He has worked for the past 40 years to support a woman who does not cook, clean, nor even provide companionship and love, and does nothing more than spend money and eat until she is a robust  three hundred pound albatross around his neck and now, should he divorce, she gets half of the stuff they have acquired and in California, she gets alimony on top.  Generally speaking these two concepts (alimony and community property) are mutually exclusive.  That is to say, if you live in a community property state, alimony is limited or non-existent and if you live in a state that assumes alimony, the primary wage earner is also presumed to have paid for and therefore own most of the stuff.  Pick your poison, is community property or alimony a better option?

Before I go any further, it is important to point out that nine (9) states subscribe to community property theory and Texas is one of those states.  It is also equally important to point out that in Texas, alimony is unconstitutional.  While we do recognize “Post Divorce Spousal Maintenance” it is NOT alimony.  Read more about Post-Divorce Spousal Maintenance here.

To fully understand community property rules it helps to think of it in the context of a business:  The community is a legal fiction in the same way a corporation or partnership is a legal fiction.  Both a community and the business entitiesare treated by the law as a person – although in the context of a corporation, it is continuously treated as an entity, whereas the community is an abstract entity that legally exist only in the context of a divorce , and a Partnership is more akin to a community (it exist at all times from inception, it is recognized as an entity that own and operates a business, but for all intents and purposes, we ignore the partnership and look at the partners inside as the actual controllers, that is until time to dissolve the partnership).  Just like a business partnership, during the marriage the spouses who are the real stake-holders “share” the stuff and presumably co-manage assets and share equally in the use and benefits derived from income.  In this way, the  community is deemed to own all property acquired during the marriage, regardless of wage-earner or home-maker status because the community is assumed to have divided the labor.  In some marriages, one party works outside the home and the other manages the home.  In this way, they have defined roles and have divided the labor.  I often have to remind the primary wage earner that the community owns all the income earned during the marriage and therefore, it is the community’s retirement plan and the community’s home, car, boat, etc.  Otherwise the spouse who managed the home, raised kids, cooked, cleaned, etc. is relegated to the role of slave labor.  Community property rules in this regard, are fair.

In a relationship where both spouses work outside the home there is still a division of labor, albeit in many instance, the couple pay a third party (daycare, cleaning service, etc.) to take care of some of the labor and they may eat out more often (paying a restaurant to prepare meals, clear the table, and wash dishes which also relieves the couple of much of the shopping duties).  The community pays for these services, the community grows, and the community shares the reward of joint labors.  That is why, when the divorce takes place and dissolves the community, the two stake-holders share in the assets.  This is no different than the corporation or business partnership that is dissolved, the shareholders/owners dissolve the business entity and divide the assets according to each partner/shareholder’s the ownership interest.  A community is no different, except it is limited to two equal owners or stake-holders.  (At least for now, the Supreme Court still defines marriage as only TWO human beings – last week’s 5 to 4 ruling that same-sex marriage in one state must be upheld in other states opens many doors, including but not limited to challenges by polygamist.  Do states that prohibit polygamy now have to recognize it, or will the Supreme Court decide when that case arises that the rules of states prohibiting the act must be obeyed by other states?)  Alas, I digress.

Texas is a community property state and our rules are simple in that everything acquired during the marriage is community property unless and until someone ask the court to declare certain identifiable property as separate property and that spouse further proves the property is separate property.  Texas law simply states that all property is community property unless it was owned prior to marriage or acquired during the marriage via gift, devise, or expenditure of property that is separate property (money or assets that can be traced or shown to be separate).  What does this mean in light of the recent rulings of the U.S. Supreme Court on same-sex marriage?  A lot.  Texas also recognizes common law marriage.  A couple (in the past, assumed to be man and woman) who live together in Texas with the present intent to be married who also hold themselves out as married are married by common law principal.

Does this common law marriage principal now extend to same-sex couples?  Does this principal apply outside Texas (the SCOTUS said marriage in one state is binding in another)?  While a same-sex couple now have the right to marry, is there a benefit in NOT going to get a marriage certificate and relying on “common law marriage” principals?  This remains to be seen, but one thing is for certain, same-sex or traditional, common law marriage is stringently defined and exist only where the two parties both intend to be married at the present time.  It cannot exist where an engagement or future marriage is contemplated.  A traditional ceremony evidences not only mutual intent to be married, it also establishes the date the community comes into existence and that is the date property acquired becomes community property.  All assets existing prior to the community (date of marriage) is separate property and again, a marriage ceremony is per se proof that a common law marriage did not exist prior to the date of the marriage ceremony.

Community property is simple and at the same time very complex because couples (regardless of personal orientation) seldom enter a union of matrimony (traditional or common law) in contemplation of divorce.  The complexity arises because no one, not even the most TYPE A person keeps sufficient records to trace all property owned prior to marriage.  Separate assets are co-mingled with community assets and loose character and in many cases, the character is retained but there is simply not enough evidence to prove it ten, fifteen or twenty years later.

Love and a desire to be together and share life’s ups and downs are the foundation of a marriage.  This foundation pre-supposes trust that the endeavor is a long term goal for both parties and that makes a pre-nuptial agreement seem cold, selfish, and cynical.  However, the New York Times reports that in 2014 the divorce rate in the US is forty percent (40%).  While that is a substantial improvement over the US Bureau of Vital Statistics report of nearly 50% (peak in the 70‘s and 80‘s), it still equates to 2 out of 5 marriages and the effect of same-sex-marriage on these statistics will not be known for years if not decades.  A pre-nuptial agreement is cheap insurance when you think about it and it is perhaps time to change the way we view these documents.  They are not a declaration that a marriage will end, they are a declaration of what exist prior to marriage and how it was acquired.  No one buys life insurance planning to die, we buy it to protect our families, a pre-nuptial agreement does the same thing when a community die and there are no monthly premiums.

Tags: , , , , ,

One Response to “Pre-Nuptial Agreements, community property, and same-sex marriage”

  1. Buffy Clary says:

    Your writing style is both simplistic by ways of making easily misunderstood legal jargon comprehensible by the most basic layman. That is certainly not stating that your educational background and knowledge of family law and divorce is not eloquently put. Quite the contrary. Thank you for your contributions via your blog and your FAQ section on your website. They are most helpful.

Leave a Reply