Saturday, January 3, 2009

Case Law Development: Husband who has no title to family home may not claim homestead exemption in bankruptcy

Teaching in a common law property state, I am struck by how often my students have difficulty separating out property title systems during the marriage from those used in divorce.  They want to apply "marital property" characterizations during the marriage, though I repeatedly emphasize that there is not such a scheme in common law title-based states. 

The United States Court of Appeals for the Seventh Circuit has provided a lovely case for emphasizing to the students the importance of the distinction between ownership systems during the marriage and those that govern upon divorce.  The case involved a husband and wife who had joint title to their home and then divorced.  The home was awarded to wife.  The couple then reconciled and remarried, but wife continued to hold the home in her name only.  During the second marriage, the couple filed for bankruptcy.  They each claimed a state homestead exemption in the family home.  Though title to the home was in wife only and husband was not liable on the mortgage, he had  contributed funds and labor and the home had appreciated in value.  Under Illinois law, he could have asserted this contribution as entitling him to a marital property interest in at least some of the value of the home upon divorce.  However the couple were not divorcing, so the divorce laws did not apply. 

Resolving conflicting lower court opinions and reversing the decision of the district court, the court of appeals held that, during the marriage, husband's inchoate marital property interest did not give him a present ownership interest in the home so that he could claim a homestead exemption.   

The case is Samson v. Belcher, 07-2174 (7th Cir.  December 31, 2008)
Opinion online
Students can also listen to the oral argument on the court of appeals website. (last visited 1/3/08 bgf)

As the oral arguments make clear, the interaction of state homestead laws and federal bankruptcy laws results in a dizzying array of decisions on the principle issue in this case, depending on one's jurisdiction.  For a good overview article of the intersection of family law and bankruptcy, see Shayna M. Steinfeld, The Impact of Changes under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 on Family Obligations, 20 J. Am. Acad. Matrimonial Law. 251 (2007).

January 3, 2009 in Bankruptcy | Permalink | Comments (0) | TrackBack (0)

Thursday, January 1, 2009

2008 in Review/ Predictions for 2009

A trip around the web reveals a number of lists looking back to 2008 and forward to 2009 in family law:

Carrie Craft's Adoption Blog on About.com has a poll taking votes on the top 10 adoption stories of 2008 --among the contenders: the highly publicized adoption cases involving Anna Mae He and Baby Talon; the Texas Polygamist raid; the Nebraska safe haven law, and issues of gay adoption.

For a list of the top ten cases from an English family law attorney, see the Family Lore Blog's Top Ten Cases of 2008

Family Law Prof doesn't much cover celebrity divorces, but for those professors who like to include the pop culture references in their classes, we refer you to Popsquire's 2008 Top Ten Celebrity Divorces list .

Finally, for 2009, FindLaw.Com has posted its predictions for the top ten "hot issues" in law in 2009 and family law issues took two of the ten spots.  The two categories the web news service notes as increasingly important to consumers of legal services in the coming year are child custody, support & alimony (with special note to the increasing interest in grandparent visitation and second parent adoption).  The second area of increasing interest is in family formation issues - marriage, cohabitation and domestic partnership.

bgf

January 1, 2009 | Permalink | Comments (0) | TrackBack (0)