EFFECT OF MARRIAGE ON PROPERTY RIGHTS

BY-
Parth Bhuta

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 SVKMS

NMIMS SCHOOL OF LAW

A PROJECT SUBMITTED

ON

Effect of Marriage on Property Rights

IN COMPLIANCE TO PARTIAL FULFILLMENT OF THE MARKING

SCHEME, FOR TRIMESTER X OF 2017-2018, IN THE SUBJECT OF CONFLICT
OF LAWS

SUBMITTED TO FACULTY:

Prof. Shyamkumar

FOR EVALUATION

SUBMITTED BY:

Parth Bhuta

B.A L.L.B. (Hons)

ROLL NO 65

RECEIVED BY: ___________________________

ON DATE: __________ TIME: _________

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 TABLE OF CONTENTS

Table of Abbreviations 3

Chapter 1 Introduction 4

Chapter 2 Contemporary Position 6

Chapter 3 European Proposals for Reforms and the 10

Reforms in India

Chapter 4 Conclusion 12

Bibliography 13

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 TABLE OF ABBREVIATIONS

Sn. no Key word Expanded Form

1. Pg. Page

2. v. Versus

3. www World wide web

4. i.e. That is

5. Etc. Etcetera

6. USA United states of America

7. UK United Kingdom

8. Ind. India

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 CHAPTER 1

INTRODUCTION

The problem that confronts is how to determine what system of law regulates the rights of a husband and
wife in the movable and immovable property which either of them may poses at the time of marriage or
may acquire afterwards. The object of this study is, as suggested by its title: "Effect of Marriage on property
rights". Important consequences may ensues depending on which law is chosen. For instance, the result of
choosing one particular legal system may be that the property of the wife passes entirely to the husband,
as was substantially the case in England prior to 1883. Again, if an Englishwoman marries a Belgian and
Belgian law is regarded as the governing system, it may be that the parties become subject to community
of goods under which everything that belongs to either spouse at the time of marriage or that is acquired
by either afterwards is owned by the jointly. They become joint co-owners of everything by the mere fact
of marriage.1

In determining the choice of law rules for identifying the appropriate matrimonial property regime, it will
be necessary to look separately at two types of case

First where the parties have not made an ante-nuptial contract and,
Secondly, where there is such a contract

In most European countries, a divorce leads to an equal split of assets, which means that the wealth acquired
during the marriage is subject to a 50/50 division between the husband and the wife if the marriage is
dissolved, regardless to whom acquired it. The community property is usually considered as an implicit
way to recognize the role of women in the formation of the household's wealth, through the domestic and
care work (Deere and Doss, 2006), which often come at the disadvantage of their labour supply. However,
it is also important to analyse the incentives that the different marital property regimes provide during the
marriage, to investigate if and how they affect the traditional division of labour. In this paper the researcher
will investigate if the division of assets at divorce affects female and male labour supply and housework
time, after having investigated the implication for such policy on marriage and divorce.

1
Rheinstein and Glendon, Internatinal Encycolopedia of Comaparative Law (1980), Vol vi, CHapetr 4, pp 47-118.
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Resistance to an equal division of marital assets continues and a more dedicated and systematic effort is
required to curb financial exploitation 2upon the dissolution of a customary marriage if the State wants
women living under customary law to enjoy their human rights under the Constitution.

In India, prenuptial agreements are very rare and do not have any governing laws. However, with rising
divorce rates people are showing increasing interest in prenups. Some lawyers are of the opinion that
prenups don't have legal sanctity in India. However, some form of contract is signed in some cases, usually
among affluent citizens. But, the agreements need to be reasonable and not violate pre-existing laws like
the Hindu Marriage Act. Indian courts allow a memorandum of settlement to be signed during divorces.
But, no court has yet been asked to enforce a prenup.3

2
https://leadershipanddevelopmentorg.files.wordpress.com/2017/02/moore-himonga_2015.pdf
3
"Legally bound: Pre-nuptial agreements have no legal sanctity in India yet a few rich and affluent insist on signing
them". Business Standard. 21 July 2012
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 CHAPTER 2

CONTEMPORARY POSITION

We dont like thinking about death or divorce when we are in the grip of a heated romance and
can hear wedding bells in our heads. We dont like talking about which assets we will claim as
ours if the relationship sours. However, it is far better to get these uncomfortable details sorted
out before you exchange rings in order to avoid losing out when things go wrong or end and
they ultimately will, whether you like it or not. Drawing up an antenuptial contract isnt about
being greedy or getting more than your fair share of someone elses wealth, though of course
there are some gold diggers out there. It is about protecting your finances when you are
vulnerable

- BY Mandy Collins.4

Ante-Nuptial Agreements/Contracts: -

A contract between prospective spouses made in contemplation of marriage and to be effective upon

marriage. Antenuptial agreements are entered into in an endeavor to settle issues of support, distribution
of wealth and division of property in the event of the death of either spouse or the failure of the proposed

marriage resulting in either separation or divorce. Commonly, the Statute of Frauds requires the agreement

to be in writing and signed to be enforceable.

Approximately 2.3 million people marry each year. Of those, over half will end in divorce. When national
divorce statistics illustrate that the probability of a marital breakup is greater than 50/50, it should come as
no surprise that the use of premarital (sometimes called either prenuptial or antenuptial) agreements is
on the rise.

A prenuptial agreement is made before and in contemplation of marriage. Typically, the agreement
discloses each partys assets and debts and specifies what happens to those items upon death or if the parties
divorce. When persons are engaged, their relationship is fiduciary in character. Accordingly, there is an
affirmative duty on each partner to disclose his or her assets and income. Failure to do so renders the
agreement invalid.5

Although fairly common today, historically, courts held that it was contrary to public policy to provide for
a financial settlement in the event of a future separation or divorce. The main reason was that such an
agreement would be destabilizing to the marital relationship and might promote marital breakups.

4
http://www.biznews.com/thought-leaders/2014/11/09/nine-things-need-know-antenuptial-contracts/
5
Kosik v. George, 253 Or. 15, 452 P.2d 560 (1969).
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Since about 1970 courts have held that agreements which set alimony, maintenance and property rights
upon divorce or separation do not violate public policy so long as they are fair and make adequate provision
for each spouse in view of the needs and resources of each.6

Example: Before Tiffany and Mark marry, they sign an agreement that in the event of divorce or
separation, Tiffany is to receive $75 per week alimony from Mark. Under prior state decisions this
antenuptial agreement would be void. The court held that, the rule that such agreements are automatically
void, is abolished. Specifically, the court recognized that divorce was a common occurrence and there was
no evidence that prenuptial agreements encouraged divorced.

Furthermore, changes in society render restrictions of prenuptial agreements inappropriate. The agreement
on alimony was valid, provided there was full disclosure, and provided the terms were not unconscionable,
viewed as of the time of enforcement.7

Given each persons unique circumstances, prenuptial agreements are not standardized. Rather, they are
tailored to the individual needs of the parties. Furthermore, they are not necessarily ironclad, unless they
are structured properly.

Elements of an Enforceable Prenuptial Agreement: -

There are three basic requirements for prenuptial agreements:

1. the contract must comply with the Statute of Frauds,

2. there must be consideration, and
3. there must be ascertainment that there is no overreaching in the contract.

Some important pointers on Ante Nuptial Contracts (herein afterwards referred as ANC) are as follows: -

1. If you dont have an ANC, you are automatically married in community of property. Many people
feel that drawing up an ANC is preparing for divorce, but its really not. Because an ANC will also
protect you and your assets if your spouse dies.
2. If you have an ANC, you will be married out of community of property with accrual, unless the
accrual system is specifically excluded. This means that each spouse retains his or her separate
property and has complete freedom to deal with that property as he or she chooses.
3. The accrual system is a form of sharing of the assets that are built up during the marriage. The
underlying philosophy is that each party is entitled to take out the asset value that he or she brought
into the marriage, and then they share what they have built up together.
4. Having an ANC in place ensures that you and your spouse are seen as separate legal entities, which
means you are protected from your spouses creditors. So, for example, if you are married in
community of property, and one of you has a gambling problem and runs up huge debts, spouses
would be jointly responsible for paying back those debts. An ANC will protect both of you against
that.

6
Posner v. Posner, 233 So.2d 381 (Fla. 1970)
7
https://nationalparalegal.edu/public_documents/courseware_asp_files/domesticRelations/ContractsMarraige/PremaritalAgreements.asp
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 5. The accrual system only applies if the marriage is dissolved either by divorce or death. You cannot
claim your share of the joint estate while youre still married.
6. Its important that both of you consult the lawyer whos drawing up the ANC because both parties
need to be fully aware of the consequences of the ANC. Its also important to see someone whos
neutral, and who can mediate what goes into your ANC, because emotions can cloud your
judgment, and it can be a stressful negotiation if one party has a lot of assets and the other doesnt,
for example.
7. The lawyer must be a registered notary the ANC has to be properly registered.
8. You cant contract out of either your ANC or community of property. So, if your spouse died and
left everything to the SPCA, or to the lover they had on the side, that wouldnt matter. You would
still be entitled to your share of their estate it is a legal, binding contract.
9. And finally, if you didnt draw up an ANC, and realise you probably should have, you can convert
from community of property to an ANC after marriage. Its more expensive, and you do have to
advertise so your creditors can object, but its possible, and a good lawyer should be able to guide
you through the process.

In the Keene case, a man and woman cohabited for approximately seventeen years knowing that they were
not legally married. The plaintiff alleged that during -this time she and defendant owned and operated
certain ranch properties and other businesses as joint ventures or partners. She further stated that she
devoted her full time and effort to the improvement and maintenance of these properties and businesses.
Plaintiff asked that she be adjudged the owner of an undivided one-half interest in proceeds obtained from
the sale of such property, the defendant being deemed to hold such interest in trust for her benefit.

The trial court found that plaintiff had no interest in the funds in question."

"In particular, the court found that 'plaintiff had no interest in said ranch [in Butte County] at the time of
said sale [in 1946] and that the same was the sole and separate property of defendant ... defendant alone';
and that defendant 'did use the proceeds of said sale to purchase certain other properties in the State of
California, but that the same were not purchased by plaintiff and defendant as partners or joint ventures ...
but the same were purchased by defendant as an individual dealing with his own separate property8

A dissenting judge in the Supreme Court argued that the court should have found an implied trust for
plaintiff to the extent that her services contributed to the property. The dissenting opinion points out that

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10 1n the common law system the question presented in the Keene case is much more likely to arise in states which do not
recognize common law marriages than in states which do recognize such marriages. As a result, many of the leading cases
are from these states. The point is, that once a purported marriage has been found to be invalid, the problems encountered
by the courts seeking to settle property disputes are similar regardless of the jurisdiction.
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one who furnishes consideration for the acquisition of property is entitled to a corresponding interest in it.
The dissent concluded that the fact that plaintiff's alleged consideration consisted of services as opposed
to actual monetary contribution should not defeat the existence of an implied trust.

The majority rule seems to be that when a woman enters into a marriage with an honest belief in its validity,
she is entitled to a portion of the property accumulated by the joint efforts of the parties during their
relationship.9 One of the leading authorities on this point is the California case of Vallera v. Vallera'6 which
was frequently referred to in the majority opinion of Keene.

Some courts in granting relief to an 'innocent party to a void marriage have likened the relationship of the
parties to that of a partnership.10 This theory was advanced in the Washington case of Knoll v. Knoll.11
Both parties entered into the marriage in good faith. The putative wife assisted defendant in the preparation
of free lunches which were served in the saloon of which he was a part owner. Furthermore, she worked
as a seamstress in addition to performing the normal household duties of a wife. Notwithstanding
defendant's contention that much of the money earned by plaintiff was spent for her personal expenses, the
court said that the property in dispute was acquired by the joint efforts of the parties, and upon annulment
of the marriage should be divided equally between them as partners. Thus the court treated the illicit
relationship between the parties as a partnership with reference to all property acquired by the "joint efforts"
of the parties.

9
Albae v. Harbin, 249 Ala. 201, 30 So. 2d 459 (1947); Lazzarevich v. Lazzarevich, 88 Cal. App. 2d 708, 200 P.2d 49
10
Werner v. Werner, 59 Kan. 399, 53 Pac. 127 (1898);
11
104 Wash. 11o, 176 Pac. 22 (1918)
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 European Proposals of Reform

In July 2006, the European Commission published a Green Paper on Conflict of Laws in Matrimonial
Property Regimes. Accompanying the Green Paper in an Annex 12, partially comprising the fruits of an
European-Commissioned study entitled, Matrimonial Property Regimes and the Property of Unmarried
Couples in Private International Law.13the purpose of the Green Paper is to launch a wide-ranging
consultation exercise on the legal questions which arise in international as regards matrimonial property
regimes and the property consequences of other forms of personal unions, including registered
partnership and de facto unions.

The Green Paper, which has been promoted by the increased mobility of persons within the European
Union and the significant increase in all forms of unions between nationals of different member state or
the presence of such couples in a member state of which they do not have nationality, often accompanied
by the acquisition of property located on the territory of several Union Countries, addresses issue of
jurisdiction.

The document seeks to explore avenues in which conflict rules across The Member States might be
improved, and suggests possible options for future legislative action at Community level. In what is the
area of considerable technical complexity, however, it is seriously questionable whether it is
satisfactorily Community-wide solution is attainable.

The most comprehensive, widely referenced summary of customary law for international water
management is in the United Nations 1997 Convention on the Law of the Non-Navigational Use of
International Watercourses.14

The primary rule15, long prevailing, was that the effect of marriage on the proprietary rights of the parties
in movable should be determined by the law of the husbands domicile at the time of the marriage.

IN INDIA: -
The Marriage Laws (Amendment) Bill 2010, which has been approved by the Union Cabinet, will give the
wife, in case of divorce, half the share in her husband's residential property. The amendment is yet to be
passed by Parliament.

"The idea is that the woman be given the right to reside in her marital home, which would ensure a roof
over her head, in case of matrimonial disputes, pending court judgments," says Asha Nayar-Basu , the
managing partner at S Jalan & Co Advocates & Solicitors. "Even the Protection of Women from

12
SEC (2006) 952
13
http://ec.europa.eu/justice_hom/doc_centre/civil/stidies/doc_civil_studies_en.htm.
14
The convention was constructed by the International Law Commission, which is a UN body composed of legal experts
nominated by states, elected by the United Nations General Assembly, and tasked with the codification and progressive
development of international law (Salman 2007).
15
Re Egretons Will Trusts [1956] Ch 593, per ROXBURGH J, at 607
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Domestic Violence Act, 2005, has given the wife the right to reside in a shared household, besides
providing for the payment of compensation to meet the expenses of the victim."

Under the current laws, property remains with the spouse, usually the husband, in whose name it has been
registered. As a result, the divorced woman has very little financial support, besides the nominal
"maintenance" granted by the courts. The new amendments will now change the two key legislations
Hindu Marriage Act, 1955 and Special Marriage Act, 1954.

While this amendment is set to remove a severe financial impediment that, at present, prevents many
women from leaving abusive marriages, there are certain grey areas even in this progressive bill.

One of the major bones of contention is that the wife gets half the property, regardless of whether the
property was acquired before or during the marriage. Many would argue that some women may take
advantage of this loophole and now marry for property and, as with strict dowry laws, the amendment
creates massive scope for misuse.

Ashtvinayak Singh, a Mumbai-based senior executive with a multinational company, says: "It gives
married women a handle to blackmail their husbands by threatening to file false cases. It is the men who
face a double whammy - they do not have the same rights over their wives' property nor can they claim
emotional damages during divorce." He says that in progressive countries, the law regarding this is simple
and is gender neutral. "Both spouses are legitimate owners of each other's property acquired after the
marriage and that is fair."16

16
http://economictimes.indiatimes.com/realty-trends/womans-share-in-marital-property-is-the-law-women-friendly-and-men-un-
friendly/articleshow/16125
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 CONCLUSION

In India, prenuptial agreements are very rare and do not have any governing laws. However, with rising
divorce rates people are showing increasing interest in prenups. Some lawyers are of the opinion that
prenups don't have legal sanctity in India. However, some form of contract is signed in some cases, usually
among affluent citizens. But, the agreements need to be reasonable and not violate pre-existing laws like
the Hindu Marriage Act. Indian courts allow a memorandum of settlement to be signed during divorces.
But, no court has yet been asked to enforce a prenup.17

Unlike all other contract law, consideration is not required, although a minority of courts point to the
marriage itself as the consideration. Through a prenup, a spouse can completely waive rights to property,
alimony or inheritance as well as the elective share and get nothing in return. Choice of law provisions are
critical in prenups.

Parties to the agreement can elect to have the law of the state they are married in govern both the
interpretation of the agreement and how property is divided at the time of divorce. In the absence of a
choice of law clause it is the law of the place the parties divorce, not the law of the state they were married
that decides property and support issues.

For the first time in India, a woman's share in marital property has become part of the marriage-related
legislation. Sachin Sandhir, the managing director of RICS South Asia, welcomes the government's
amendment to the marriage legislation, where the female spouse is entitled to 50% of the residential
property. "Such amendments in legislation will ensure that women continue to have a sense of physical
security, even though the marriage has come to an end through mutual consent." He says that while this
"development is welcome, the Marriage (Amendment) Bill should also address the fact that women should
be entitled to a share in all other property acquired during the course of marriage and not just residential
property."

Moreover, as parties intending to be married deal at less-than-arms-length in a confidential relationship,

limitations on complete contractual freedom are appropriate. In any event, as these agreements become
more prevalent in the coming years, the lawyer who is adept at understanding their limitations will be well
served.

17
"Legally bound: Pre-nuptial agreements have no legal sanctity in India yet a few rich and affluent insist on signing
them". Business Standard. 21 July 2012
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 BIBLIOGRAPHY

Websites Referred:

https://nationalparalegal.edu/public_documents/courseware_asp_files/domesticRelations/Contract

sMarraige/PremaritalAgreements.asp

http://www.austlii.edu.au/au/legis/cth/consol_act/fla1975114/s90c.html

http://www.aaml.org/sites/default/files/MAT210_1.pdf

http://www.thailandlawonline.com/article-older-archive/mariage-contract-prenuptial-in-thailand

http://economictimes.indiatimes.com/realty-trends/womans-share-in-marital-property-is-the-law-

women-friendly-and-men-un-friendly/articleshow/16125718.cms?intenttarget=no

http://moj.gov.jm/sites/default/files/laws/Property%20(Rights%20of%20Spouse)%20Act.pdf

http://ec.europa.eu/justice/civil/family-matters/marriage/index_en.htm

http://scholarlycommons.law.wlu.edu/cgi/viewcontent.cgi?article=3364&context=wlulr

http://conference.iza.org/conference_files/SUMS_2015/piazzalunga_d9416.pdf

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