Tuesday, February 16, 2010

Ratner: "But from Where Will the Money Come? Community Property Liability for Child Support and Other Premarital Obligations"

James Ratner (University of Arizona) has posted "But from Where Will the Money Come? Community Property Liability for Child Support and Other Premarital Obligations" on SSRN.  Here is the abstract:

Marital debt is normal, but confusing. In some community property jurisdictions, debts incurred by one spouse can be satisfied from all of the assets managed and controlled by the debt incurring spouse (a managerial regime), while in others from the debt-incurring spouse's separate property plus that spouse's "share" of the marital assets (a partition regime), and in still others from only the separate assets of the debt-incurring spouse for separate debts and from all the community assets if it is a community debt (a CP debt/SP debt classification regime). The various community property jurisdictions have fined-tuned these structures to create hybrid systems that combine aspects of each of the regimes. Frequently debt originates prior to a marriage (hence the description "premarital debt"), however, creating an additional problem: During a marriage, which assets should be available for premarital creditors? A pure managerial regime fails to adequately protect the nondebtor spouse's undivided one-half ownership interest in each community asset, while a pure CP debt/SP debt system effectively enables a debtor to commit "bankruptcy by marriage." Partition systems developed to address these problems offer premarital creditors access to those assets for which the creditor would have had access if there had been no marriage. This partition-style premarital debt structure, however, is employed for child support and spousal support orders as well as for more typical debt and tort liability incurred prior to the marriage.

Application of such premarital debt structures to child support is unfortunate. It implicitly may facilitate child support shirkers, effectuates a hierarchy for a choice between support of children of relationship #1 and children of relationship #2, and perpetrates an old stereotype - the wicked, unsupportive step-parent. Child support is more sensibly treated as an on-going obligation of a support-owing parent's current marital community, and not as a premarital debt. Thus I propose that all community assets, including the earnings of the spouse who is not obligated to pay child support, be available to satisfy a child support order. Under the current regime, those earnings are unavailable, because they are not assets that would be the debt-incurring spouse's separate property except for the marriage. While a usual argument against my proposed approach is a fear of discouraging marriages, such a fear is unwarranted in this context. The specific nature of child support obligations, which cannot be bargained-around and which are limited in duration by the age of the child, drives my conclusion that it is not a premarital SP debt. Spousal support obligations, in contrast, more closely resemble typical premarital debt, and should continue to be treated as premarital obligations to which a premarital debt partition structure sensibly applies.

AC

http://lawprofessors.typepad.com/family_law/2010/02/ratner-but-from-where-will-the-money-come-community-property-liability-for-child-support-and-other-p.html

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