Academic

Carroll on Incentivizing Divorce

By Lawrence Solum

Andrea Beauchamp Carroll (Louisiana State University, Baton Rouge - Paul M. Hebert Law Center) has posted Incentivizing Divorce (Cardozo Law Review, Vol. 30, 2009) on SSRN. Here is the abstract:

Marriage is an important relationship, both for the parties to it and for society as a whole. Its benefits, stemming from the economies of scale and joint consumption inherent in the relationship, are largely unquestionable. And when marriage fails, the results are rather staggering. Economically, it is estimated that the annual cost of divorce to American taxpayers approaches $30 billion. From a social science perspective, the negative impacts of divorce on women and children have long been decried. In the face of these facts, we expect family law to fulfill a certain role. It should channel parties into the relationship that best serves society and take reasonable steps to insure that they remain there. Generally, family law functions in exactly this manner. This article explores the failure of family law to perform that role in an area in which we would expect the law to be most protective of the marital relationship. Specifically, the article explores how marital property rules often serve to incentivize divorce.

Three examples of marital property rules which render spouses better off divorced are explored. First, spouses may divorce to garner an advantage vis-a-vis their creditors. Surprisingly, some states actually allow spouses to substantially narrow the assets creditors may seize to satisfy their debts by simply divorcing. Second, a spouse who finds himself married to a spendthrift may find divorce is the only way to protect himself from the other's mismanagement. Because the American states have not widely adopted a method of unilateral termination of the marital property regime which is common abroad, a spouse in this country has no mechanism whereby he might terminate his marital property regime, yet still remain married. Third, the federal rules governing most pensions create an incentive for an ailing spouse to consider a "quickie divorce." Specifically, the provisions of the Employee Retirement Income Security Act (ERISA) give protections to divorced spouses that the heirs of spouses whose marriages end by death are not afforded. The effect of each of these rules, then, is to incentivize divorce.

A shift in thinking about the rules of marital property is desperately needed. In addition to pushing ambivalent spouses toward divorce, these marital property rules fail to fulfill the normative and expressive functions typically served by rules in the family law sphere. These rules send the wrong message, both about marriage itself and about the core of the spouses' economic partnership. This article seeks to incite a change in the rules of marital property. If these substantive rules are not reversed entirely, family law scholars and lawmakers should, at a minimum, begin to focus calls for reform on modifying the rules to remove the perverse incentives to divorce that they carry.

Full post as published by Legal Theory Blog on May 12, 2009 (boomark / email).