02 December 2011

A Trifurcated Contract Approach To Property Issues In Divorce Considered

In a divorce, the main issues are the termination of the marriage, parenting time for children of the marriage, parental decision making for children of the marriage, child support obligations, the division of marital property, and the need for a maintenance award, if any. As I explain below, there are good reasons to consider the seemingly complicating process of "trifurcating" these decisions into three different decoupled proceedings.

If divorces were trifurcated, with (1) parenting delegated to one forum (not necessarily such a foreign idea; when I was admitted to the bar, New York State's Family Court in each county with jurisdiction over parenting, but not the authority to grant a divorce), (2) termination of the marriage itself delegated to a ministerial official as a matter of course, and (3) the remaining issues of marital property and maintenance handled by the civil courts of general jurisdiction as they are now.

Unmarried co-parents would need only the first. A legal separation is, of course, the first and the third component of these proceedings without the second. Married people who were not co-parents or had only adult children or who managed to reach a mutual agreement regarding parenting issues would need only the latter two. Couples that managed to resolve marital financial issues out of court, or for whom the financial stakes did not justify the effort and expense associated with litigation, might dispense with the third component.

People would invoke the legal system's assistance in this private law matter only to the extent actually necessary, and could avoid state intervention in either the parenting component, or the financial matters related to marriage component if they could reach a mutual agreement. Separation of the forums and greater predictability for the financial component (on the merits) and termination of marriage component (in terms of timing) would also make it harder for one party to act strategically to secure, for example, concessions on financial issues in exchange for parenting time.  An ethical rule prohibiting enforcement of such agreements and prohibiting professional advocates in each forum from proposing such settlements would also be easier to impliment if the forums really were separate and the professional advisors to the parties in each forum were likely to be different people with different kinds of professional credentials.

I also consider an approach to the third issue that is framed in analogy to a suit for breach of contract or unjust enrichment, rather than what amounts to a property law concept analogous to a partition action.

I don't necessarily belief that this would be better in all respects than the status quo, but it is worthwhile to recognize conceptually that there are alternatives to the status quo that could make sense and to explore the pros and cons of them.  This post is one such attempt.


The law has evolved in the United States to a point where the issues of parenting time, parental decision making, and child support have been largely decoupled for the other issues in a divorce.

Disputes between separated parents concerning parental rights and responsibilities have been almost completely decoupled from those particular to divorcing couples. The same rules apply whether the parents have never been married, are currently married but separated, or are divorced, and without regard to whether or not they have remarried.

It would be practicable under current law to have two different proceedings, one related to parenting and the other related to marriage, possibly in different forums using different rules of procedure.

The law in this forum would be quite straightforward.

Ex ante marital agreements regarding parenting are always voidable. Even guardianship designations in a Will are merely presumptive and can be overruled by a judge who finds by a preponderance of the evidence that someone else would be better at the time and place when the guardianship must be established.

Every jurisdiction in the United States uses a best interests of the child standard to govern disputes regarding parenting.

Child support schedules and standards for establishing paternity administratively are largely uniform nationally because federally funded welfare programs set standards that must be met in order for a state to be eligible for these funds.

If parenting were handled in a separate forum from divorces, the rules for parenting actions (where there is no inherent reason for money to litigate the matter to be available) could be dramatically simplified. Complex financial affidavits could be trimmed to include only matters pertinent to child support calculations. One could authorize independent non-lawyer professionals who were certified to have expertise only in the narrow corner of the law to advocate for parties, instead of much more expense lawyers. Parenting decisions, for children who refuse to stop growing and changing even when their parents are in court, would not have to be held hostage to the time necessary to effect due process with regard to more complex financial issues. Civil procedure principles and evidence rules designed for contract and tort actions between strangers tried by juries could be revised to be more appropriate for these kinds of decisions.

For example, it is much harder to make sense of Colorado Rule of Evidence 402 (irrelevant evidence inadmissible) when the substantive decision making standard in the case is to act in the best interests of the child, and it is absurd to have the exclusion for character evidence found in Colorado Rule of Evidence 404.  More generally, the rules of evidence fundamentally assume that the parties are proving the narrowly construed elements of a cause of action which includes only past material facts, when the best interests of the child test is fundamentally a forward looking legal doctrine about what is likely to happen in the future rather than what has actually happened in the past.  The doctrine inherently involves opinions, but few of those opinions the kind of opinions that are contemplated by Colorado Rule of Evidence 702-706 (expert witness opinion testimony).  Many of the predictions a judge is expected to make in a parenting case about what will work best would be called speculation in other kinds of litigation.

It also might be easier politically to rally support for a statutory right to a state funded paraprofessional advocate for each party in this kind of forum, than in a forum where the termination of marriages and the division of assets of people who are often middle or upper middle class was at issue. But, even if this wasn't done, it would be much more feasible for lawyers to provide unbundled services in a trifurcated process than in an all purpose dissolution of marriage action.

Termination Of the Marriage

The issues that are particular to divorce itself are the termination of the marriage, marital property division and maintenance. In the fault era, proving up grounds for termination of the marriage was the main event. In the on fault era that now prevails, however, unilateral termination of the marriage is available on demand for all intents and purposes.

One could just as easily effect a termination of the marriage by a perfunctory filing with the clerk of the court, or the clerk and recorder, or the ministerial governmental official who issues marriage licenses, of a "notice of intent to terminate marriage" (or alternately, a "notice of intent to legally separate") with proof of service upon the spouse, which would either mature into a termination of a marriage effective immediately upon expiration of the statutory cooling off period, or alternately upon the affirmative filing of a "termination of marriage" after the cooling off period has expired.

Indeed, one of the reasons that we have so many pro se parties in divorce actions (60% of cases have no attorney on either side) is that the courts have a monopoly on granting terminations of marriages, while most other kinds of civil matters can be resolved outside the court system without judicial involvement if a mutual agreement is reached between the parties, often without lawyers if the expense of a judicial system solution doesn't justify the expense.

The ability of a spouse to terminate the marriage promptly prior to resolution of other issues, would also reduce the often long ambiguous period of limbo in which a couple is married but in the process of dissolving a marriage in which there is little practical legal benefit to the marriage continuing to exist in theory, when the existence of a theoretical marriage rather than a marriage that is already officially over can exacerbate the emotional tensions of the parties over relationships with new significant others, can muddy the waters in states that have a marital exception to rape or testimonial privileges related to marriage, can lead to absurd conclusions based upon the fiduciary relationship between spouses that exists during the marriage, and holds the substantive question of the date upon which separate earnings, debts and appreciation in assets are truly separate hostage to the happenstance of hearing scheduling in the judicial system.

One Time Financial Issues Unique To Divorce

This would leave property division and maintenance which are one time financial issues which are unique to divorces.

One of the things that makes litigation of this last point difficult is that the issue of marital property is handled essentially like a partition action between co-owners of property, with an emphasis on in kind divisions. A divorce decree routinely retitles much or all of a couple's property, a process complicated by the fact that the court will typically not have jurisdiction over third parties with interests in marital property like mortgage and vehicle lenders, credit card companies to whom one or both spouses owe money and so on.

An alternative to this approach would be to create a contract right to a money judgment equal to half of the fair market value of the total value of the marital property reduced by the fair market value of the marital property (net of marital debts) still in the name of the spouse seeking a property equalization judgment. The parties could agree otherwise, or appeal to the court in the action to partition property titled in the names of both parties that is not easily divisible, like a marital residence, but the default rule would be that title would remain as it was when the action was commenced unless otherwise agreed. The default property division decree in a divorce, under this system, would be a single dollar amount that one spouse owed to the other with statutory interest.

One could imagine a similar approach to separate maintenance. A rule, ideally one that provides much more definitive guidance than the "do the best thing" gillion factor test that applies under current law, would establish how much maintenance, if any, one spouse was entitled to from the other, and if not otherwise agreed, this could be reduced, based on life expectancy projections and a statutory interest rate, to a single dollar amount that would be added or subtracted as the case might be to the property division money judgment and would accrue interest at the same statutory rate.

In order words, as in a breach of contract action or unjust enrichment civil action, once a cause of action to establish that the marriage had been terminated was established as a matter of course, the job of the court would be simply to determine the dollar value of the non-fault based damages for the breach that reflect the benefit of either the default bargain established by law, or an alternate bargain reached in a marital agreement. The property rights of each of the parties would generally be unaltered and identical to those of unmarried cohabitants in the absence of an agreement to the contrary by the parties.

With more firm rules (an equal share of marital assets rather than an equitable one, and a more formulaic maintenance award rule), that would make much less information relevant, in many cases the only discovery that would be needed would be an exchange of financial affidavits, and even when more discovery was needed, the scope of discovery, and the scope of the evidentiary issues that would be relevant at trial, would be much narrowing in this trifucated proceeding context.

Of course, unlike a traditional contract or unjust enrichment action, a pre-judgment temporary order for maintenance, charged against the ultimate award, might be the norm rather than the exception.

There would be a statute of limitations to bring a property equalization and maintenance suit that would begin to run from the termination of the marriage or in the alternative a desire to be legally separated, similar to a breach of contract or unjust enrichment action, and, if either party felt it was worth the money to bring that suit they could, or they could settle in the shadow of what a court would be likely to do in such a suit, without actually commencing an action, or the spouse entitled to a remedy could decide that the returns were not worth the hassle to receive them, for example, in the quite common case of a divorce where the couple has a low net worth and the husband's income is not very impressive relative to the wife's after adjusted for child support payments that are paid or could be paid.

Maintenance and property division debts could be collected over time, via the garnishment process, or via creditor collection remedies. Rather than being bankers to each other, there would be an incentive for parties to pay off their debts to their ex-spouses in lump sums that would end the need for further resort to the judgment collection process, with third parties, thus disentangling them from each other completely.

A simple money judgment will typically involve much less documentation that requires the skilled assistance of an attorney, than a detailed in kind distribution that requires many assets to be retitled and raises questions of alienability and creditor's rights.


The naive expectation that handling all issues between two parties in a single forum is more efficient is often wrong.

The concept of breaking the consequences of a single incident into three different forums is really not so remarkable. For example, following a drunken driving traffic accident, there will usually be a criminal prosecution for drunken driving, an administrative proceeding to revoke or assess points against a driver's license, and a civil proceeding for compensatory and/or punitive damages against the drunk driver brought by people who are harmed in the accident. Trying to do all three things at the same time would make the process much more cumbersome.

Breaking up parenting disputes between non-cohabiting parents of minor children, the termination of a marriage, and financial adjustments to reflect the benefit of the marriage bargain that each spouse is entitled to, into three separate forums, would simplify a process. This is sensible because the process is often handled without lawyers, so each forum's process needs to be simple, would make the process move more swiftly because it could proceed on parallel tracks that would not have to be coordinated with each other, and would allow people who didn't need all three components of a tradition divorce action to only petition the courts for assistance where it was actually needed. It would also bring clarity to legal doctrines that currently have to be twisted to meet the natural doctrinal consequences of legal fictions like the continued existence of a marriage during the pendency of the dissolution action.

The conception of a dissolution action as primarily being an action for partition in kind of marital assets and debts, rather than a contract action that evens the scales on a net fair market value basis with reference to a merely hypothetical division of marital assets and debts, could also considerably simplify divorce litigation and the loose ends that persist after a divorce, by making the default financial component of a divorce a mere money judgment for a sum certain for property division and maintenance combined unless otherwise agreed that leaves the nominal ownership of property and the nominal debt obligations of the parties to third parties unchanged.

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