Protecting Personal Property
What are some of the ways to protect personal property before a couple gets married? What are some of the issues concerning personal property when a married couple is deciding to divorce? How is the personal property valued when the court has to allocate judgment upon divorces? As this paper demonstrates, the subject of personal property within the contexts of marriage and divorce is a highly complex one, subject to a range of legal codes and precedents and, ultimately, often highly contingent upon the discretion of individual judges.
The most common means of protecting personal property before a couple get married is with a prenuptial contract compiled and signed prior to marriage and as a condition of the wedding. These contracts clearly stipulate beforehand how any properties the two parties take into the marriage or accumulate during the marriage will be divided in the event that the marriage should be dissolved. Unfortunately, the legal literature on prenuptial contracts is still underdeveloped, while in some jurisdictions the enforceability of such contracts remains the subject of controversy. Indeed, American courts long refused to enforce prenuptial contracts that appear to contemplate divorce, moving to enforce such agreements only since the 1970s. Moreover, prenuptial agreements, as well as property distribution agreements negotiated while a marriage is ongoing, remain considerably less common in the United States and other countries than are separation agreements compiled after marriages fail.
When a couple decides upon divorce, the division of personal property is complicated by a range of factors. In the United States, the variables affecting personal property in relation to marriage and divorce largely depend on the state in which one resides and, in particular, on how that state structures property ownership within marriage and on whether the state is a common-law or community-property state. In the “model” common-law state, legal title to property owned either jointly or separately during the marriage is generally recognized and the title holder retains ownership after divorce. By contrast, in the “model” community-property state, all property acquired during a marriage—with the exception of inheritances and gifts to one spouse—is regarded as jointly owned “community” property and is divided evenly between the two spouses. In recent years, however, many of the common-law states have moved to “equitable distribution” schemes in which, much as is the case in the community-property states, all property owned at the time of divorce is regarded as marital property. A major problem with such equitable distribution regimes is that the law has failed to provide a workable definition of what is equitable in divorce.