I. Introduction

I have been asked to speak about marriage covenants or equal partnership protection. In the time allotted, I will try to convey my thoughts about an adequate economic regime for the marriage institution in our countries, which are on the threshold of the twenty first century.

At the outset, we must bear in mind that in western culture marriage has traditionally been viewed, not as an economic partnership but rather as a lifetime commitment of a woman to a man, of a female homemaker to a male provider, a master of the financial aspects of the union. Marriage, as a bond of man and wife, having equal rights under the law, is only a social aspiration of rather recent origin.

The premise that marriage is much more than a lifelong personal commitment, a partnership among coequals, is slowly taking hold in important sectors of society.[1] Because ’til death do us part’ no longer applies, the economic aspects are more important than ever today.[2] However, in our opinion, the financial side of the institution should not be overemphasized, for husband and wife do not join their lives for the primary purpose of accumulating wealth. There are other more appropriate social institutions serving that purpose

This modern view of marriage as a joint venture among co-equals is not yet a complete legal reality in many of our countries. There are strong pockets of resistance, because ours are inherently unequal and discriminating societies. Control over wealth has traditionally been the domain of men. Property has for millennia been owned, controlled, and disposed of by men. Women have been perceived, even among themselves, as dependent and in need of protection, incapable of deciding patrimonial matters. As has been stated in a recent publication, women generally have a collective social history of disempowerment and subordination, which explains to a great extent the prevailing state of inequality they are subjected to in our jurisdictions.[3]

Current constitutional mandates in our countries requiring equality among the sexes must be turned into an operational reality. It has been stated that equality, to be effective, must operate in a threefold sphere.

In the personal sphere, equality implies perceiving a fully equal person in your partner. The old notion that it is the husband’s primary obligation to protect his wife, and her duty to obey him, must somehow yield to a relationship of coequals bent on the common task of raising a family.  Protection and obedience must yield to mutual respect and collaboration.[4] In the economic area, equality implies that your spouse is an equal partner both in profits and in risks, that enjoyment of family wealth is shared not only at the end of the marriage but on a daily basis. It is in this area where, in our view, legal action can achieve some success. You cannot legislate love, not even a smile. But you can legislate equality as concerns the enjoyment and distribution of accumulated family wealth.

However, equality among spouses, to be fully effective, must also affect the other members of the family unit. This means that both spouses are expected to protect the best interests of members of this unit, particularly minors and incompetent children.

Fortunately,  we  can  perceive  that  the  desire  for  equality  is  increasing  in  all  sectors, especially among women. This includes expectations not only for equal participation in the distribution of the accumulated wealth, but equal rights in the administration and disposition of that wealth. That is to say, equality now and not only at the culmination of the marriage. Equality means mutual respect and fidelity, each one intimating equal duties toward the family it also means that the selection of the family home is decided by mutual consent.

Those sectors disillusioned with current shortcomings in the legal system should, however, be advised that legal norms are seldom effective to insure marriage cohesion. In a harmonious union, the decision-making process is usually beyond the mandate of the laws. As a matter of fact, laws are highly ineffective in strengthening married life and at times, they may even be an obstacle.[5] Thus, it appears that the solutions too much of our marriage problems, must be found outside the law. Strengthening the basic social institutions such as family, school, and church appears to be the only viable alternative to future family crisis. Experience indicates that the weakening of the family is a lengthy process. It is that weakening which lies at the base of many current social problems besetting our countries, including drugs, crime, teenage pregnancy, abortion, school dropout, and a high suicide rate.[6]

One way family unity may be strengthened is through a just economic matrimonial regime. Since divorce and death are two of the main events to transfer wealth in society, and since we all aspire to a more rational and equitable distribution of accumulated wealth, it should be a legislative priority to provide our jurisdictions with an adequate family economic regime. We are not intent on developing a new one. There are various alternatives available whose effectiveness has been proven for generations.

II. Choosing a Regime

Choosing a matrimonial regime depends on the particular circum­stances of each society, its social and economic conditions, the existing level of equality among the sexes and its particular view of marriage and the family.[7]

It should be a regime that would not impede, but rather facilitate dealing with the economic and  personal  hardships  found  in  the  ever-increasing instances  of  family  crisis  within  our societies. It must address the special needs of the weaker members of the family unit, as well as the so-called residual family.

The chosen regime, as will be explained, must provide for change, thus facilitating much needed adjustments when a marriage crisis affects the family unit. The immutable approach prevailing in jurisdictions like Puerto Rico constitutes a rigid constraint too many married couples.

A suppletory legal regime must suit the majority.[8] Although unpolled, it appears that in most of the civil law jurisdictions the community property system seems to be favored. That is the particular case in Puerto Rico, where there is no evident tradition of entering into marriage covenants, which generally serve to further the interests of blood relatives rather than those of the spouses. Covenants are usually designed to perpetuate differences and similarities, which according to their proponents are important to the economic or personal well-being of one or the other.[9] Actually, young, poor, and first marriage couples do not have much need for marriage covenants.

Various options should be available to couples. Plurality of matrimonial regimes is a desirable approach in dealing with our complex societies. We no longer have the uniformity of personal behavior and of family models that characterized the era of codification. Freedom to select a patrimonial regime, although with certain restrictions, is more in tune with current Western social pluralism.[10]

Nevertheless, an adequate regime should not only encompass the so-called “normal” marriage, but also a marriage in crisis. It should provide temporary solutions for that critical stage many couples reach which is between judicial intervention in the crisis, and the final dissolution of the marriage bond. It should provide a set of rules that can bridge those two points in time. This does not suggests that a society be expected to legislate on small, fleeting marriage problems, which no marriage survives without. We refer to crises, that is to say, marriage pathology. For them the regime should contain pendente lite measures intended to protect the family members. Rules are required that will lead to an economical and rapid resolution of the crisis, which might be the result of a crisis of confidence among the spouses.

III. Economic Regimes: Options

A general examination of the prevailing matrimonial regimes in Western societies would indicate that they run the gamut between two extremes: at one end, the universal community and at the other end, separate property.

A. Universal Community

Under the universal community model, all property owned by each spouse, no matter when, or by whatever title acquired, is transferred to a common fund, and upon divorce or death, it is equally divided among them or their children. In countries like Puerto Rico and Spain, where community property constitutes the subsidiary legal regime, universal community is the real regime for most spouses because the average couple marries with no financial resources. However, in cases where at least one individual has accumulated some wealth, we may reasonably expect resistance to universal community, particularly if one considers the alarming rate of divorce that prevails in our countries. If marriage were to conform to the social aspiration of a lifetime union, we suppose there would be less resistance to universal community, considering its affinity with the marriage institution. It has been repeatedly said that it is both proper and convenient to the spiritual unity of spouses to correspond to patrimonial unity.

In countries where the “legítima” is a serious impediment to mortis causa disposition, universal community is becoming an adequate testamentary alternative. Universal community is a worthwhile alternative for couples who survive the difficult initial years or those who marry later in life, whose separate property regime had to be modified, as well as for those whose main worry is the well-being of their marriage partners after their own deaths.[11]

B. Community Property

In our opinion, the community property regime, or “sociedad legal de gananciales”, is the system best suited to the marriage relationship; it is conceived as a joint undertaking of personal and economic relations, and of risks and economic benefits. Community property is the most common patrimonial marriage regime in the world today.[12] It affords the utmost protection to women, especially to those who chose marriage as a career -to the homemaker, the mother, the child-rearer and custodian

When it originated one of the main deficiencies of the community property regime was that it discriminated against married women, because the administration and disposition of the com- mon mass, and even the wealth of the wife, was entrusted to the husband. Co-administration of common property is a rather recent development in some of our countries. In Puerto Rico, it became a legal reality in 1976.[13] In Spain, it was achieved in 1981,[14] in Germany in 1957,[15] and in France in 1965.[16]

Another advantage of the community property regime lies in the fact that it encourages cooperation of both spouses in the production of wealth. However, the traditional view has been that only contributions in material wealth are relevant. Recent developments, fortunately, are accepting the wife’s homemaker services as no less important. It can persuasively be argued that the services of the homemaker make possible the financial contributions of the other spouse.[17]

Contrary to other regimes, under community property, the eventual participation of each spouse is attributed in kind and not in value, thus insuring something more than equitability, full equality. We are aware, however, that in some cases distribution in-kind may not be convenient, such as the case when the controversy involves the distribution of agricultural, industrial or commercial operations. Breakdown of assets in those cases has its economic and social costs. Some adjustments are in order for cases of that type.

Notwithstanding the foregoing advantages, we must address some of the shortcomings. First, we must be aware that in establishing the private-community property dichotomy in our Civil Codes, nineteenth century ideas on the relevant forms of wealth still prevail. They are replete with references to real estate, livestock, and to a lesser extent, to movables. The latter were not as incredibly diverse as in modem times. Our Codes still reflect the ideas of a rural society in the manner they deal with the limited forms of wealth of a century ago.

Within that traditional setting, the rule of equality in the distribution of the accumulated wealth was conditioned on the refunding to each spouse all the private property he or she contributed. Reimbursement presents today, even more so than at the turn of the century, a serious problem. To begin with, current law does not require an inventory of private property, much less, of its valuation. This has the inherent difficulty of determining what exactly it is it that must be reimbursed. In referring to movables, especially cash, it must be traced along the years of married life, which is almost impossible. With immovable, the rural farm may become rural lots, the small restaurant, a fast food chain, etc. But the decreasing value of property is more complex. Our codes do not provide for reimbursement of real but of nominal value, regardless of inflation and the devaluation of cash. Reimbursing nominal value inevitably leads to unequal treatment in the distribution of marriage wealth.[18]

But equality is much more threatened by the fact that, consciously or not, relevant forms of wealth in the family today are excluded from the traditional definition of community property.[19] New  forms  of  wealth,  perhaps  the  most  relevant  in  explaining  current  socio-economic differences, are not included in the Codes. Judges, under the influence of the old definitions, have mainly kept them out of the reach of the community, to the detriment of one of the spouses, usually the wife. For instance, professional licenses and degrees; life insurance proceeds; pensions, vested or not;[20] stock options and profit sharing plans, are generally excluded; notwithstanding the presumption that property belongs to the community, if produced by the family while the marriage nexus is in effect.

But even within the traditional ideas of what marital property is and what it is not, a new approach, in our view, is needed. In many of our community property jurisdictions the inception of title theory prevails. The date a particular item of wealth is acquired is determinant in whether title is vested in one spouse or in the community; depending on whether the contract toward its acquisition was executed before or after the marriage ceremony, even though the spouse who acquired it did not pay full price. Under this type of solution, unjust results are inevitable.

The date when a legal obligation to pay is created should not be determinant of the rights of the parties. Acquisition by installments is an on-going process because title is not necessarily acquired on the date a legal obligation to pay is  assumed.[21]  In this respect, not only the acquisition of title, but also the source of funds for the acquisition of property should be determinant, and non-monetary contributions should also be considered.[22] It can be argued persuasively that in those situations there was a tacit agreement that the property was being acquired by the community, rather than by one of the spouses, so that the community obtained an equitable lien or a right to reimbursement.[23] This approach in our view is much more consistent with the nature of marriage as a joint undertaking in risks, as well as in benefits.

Entrenched ideas about what constitutes private property has led to an unjust distribution of the increases in value of family wealth, especially when the increase is attributed to the inherent nature of the property.[24] The traditional solution deprives the homemaker spouse of a fair share in the increase, since property has traditionally been owned and controlled by men. From our standpoint, he or she who contributes homemaker services  should have a fair share in the increase in value of their partner’s property, whether it is due to its inherent nature or not. Equal partnership protection requires no less.

There are, however, elements of wealth that, in our opinion, by their very nature, must be considered private property, regardless what patrimonial regime prevails; such as property inherent  to  the  person,  not  subject  to  intervivos  or mortis  causa  transfers,  e.g.  alimony, life interests in property, copyright, etc. The same should apply to objects of personal use, from the most basic to the most bizarre,[25] which no matter how, and by whom, they were brought to the marriage, should be permanently assigned to the person who uses them. Personal clothing, furniture, and household goods or utensils of the habitual dwelling of the family, and even the motor vehicle used for family travel, should be assigned to the surviving spouse or the head of the residual family unit.[26] The same holds true for the tools needed to engage in a business or profession,  because  although  a  person  may  fail  as  a  spouse,  they  need  not  fail  in  their professional or financial pursuits.

C.  Separate the Property Regime

Although available in many of our Civil law communities as a conventional alternative, it has hardly been used. On the threshold of a loving relationship, couples are not inclined to negotiate what they consider to be trivial economic matters, except when blood relatives take the initiative. In English- speaking countries, on the other hand, separate property has been the rule. In its most basic form, separate property is generally detrimental to one of the parties: he or she, who enters the relationship without initial wealth, or income-producing potential, is at the end, condemned to poverty.[27] For the wealthy or professional woman, separate property offers the advantages of independence and self-esteem. She is specifically free from her husband’s debts, and in particular, from any alimentary obligations to her husband’s children.[28]

Separate property may be an adequate alternative for elderly couples, divorcees, widows and widowers, and for spouses with substantial wealth, or with children from prior relationships; and above all, for those rare cases in which one of the partners engages in financially risky activities. Separate property has the added advantage that there is no confusion in each spouse’s patrimony. This insures certainty in economic transactions with third parties, for each one is sole owner not only of what he or she brought to the marriage, but also, of what he or she acquired by whatever title, during it. In sum, it may be said that if both spouses are substantially equal financially the separate property regime is an adequate alternative. We cannot ignore the fact that at least in theory, it is a regime that conforms to present social goals of liberty and equality among spouses.

However, for it to operate properly, equal bargaining power is a prerequisite and unfortunately men and women, as the case of employers and employees, are rarely equal at the bargaining table.

D. Other Regimes

Many jurisdictions, aware of the criticisms against their traditional matrimonial regimes: community or separate property, have developed intermediate alternatives, such as profit sharing, community of acquests, and community of movables and acquests, under which each spouse is sole owner and administrator of their own wealth, whether brought into the marriage or acquired thereafter. It is at the conclusion that each one is entitled to share in the profits acquired by the other. Through them, you retain the main advantage of community property, e.g., sharing in wealth accumulation, and that of the separate property regime, e.g., the right to administer, disposes of, and enjoys property without interference from the other. In other words, these supplementary regimes, while in operation, function as separate property. It is at the conclusion that the community property principles become operative.

IV. Compulsory Rules

For those who are willing and able to devise a set of rules and regulations suitable to their own needs, it is the duty of the State to inform them about what boundaries they should not overstep. Two sets of norms must be provided in whatever regime is chosen by a given couple: those that apply generally, and those whose purpose it is to define the limits of contractual freedom.

With respect to the first type, we believe, the following limitations should always apply:

A. Mutual Information

Spouses must be required to inform each other regularly about to their patrimonial matters. That is to say, about his or her current financial condition and management of the family or personal wealth. Many of the difficulties confronted by courts and litigants in dissolution proceedings have their roots in the lack of information of one of the parties, (ordinarily the wife) about the financial condition of the marriage.

B. Family Residence

The home is ordinarily one of the most, if not the most, valuable component of wealth in many families today. It is the place where the rights and duties of the marriage relationship are exercised. The most important functions of human life are carried out in the family residence, including the socialization and education of its members. Regardless of traditional ideas of title, the relevant legal nexus in the home in an active marriage is co-possession. Both spouses should exercise possession for the benefit of the family unit. This being the case, when crisis develops, transfer of possession must be governed by concepts of family protection. The residual family, usually the custodial parent and their minor or mentally unfit children, must have preference, either on a permanent or on a temporary basis.

The traditional emphasis in some of our regimes in equal division of wealth for events such as separation, divorce, nullity or death, ignores the fact that the basic ideas about justice are not fulfilled because equal division is not always equitable. What is needed is not quantitative but qualitative equality. This infers that upon divorce or death the family residence should be assigned on the basis of family needs. It may be owned by him or her, or even leased to third parties, but while the residual family unit needs it, title prerogatives must be suspended.

The right to sell, lien, mortgage or lease, or even destroy it, must be limited. The written consent of one’s spouse is needed for those acts, even when it was brought to the marriage by only one of them. Fortunately, in some of our Western jurisdictions there has been legislation to that effect.[29]

There are valid alternatives to insure that divorce or death do not deprive the surviving head of the family of this most necessity of life. UMDA-type legislation[30] is one of these alternatives. However, the postponement of wealth distribution after death or divorce may also be effective. Still another alternative may be a right to preferential attribution to the widow or widower. A general grant of discretionary judicial power towards the protection of the surviving or custodial spouse might also be sufficient.

C. Homemaker Services

In our countries, women who choose marriage as a career and give up their professional growth are generally not treated fairly in property distribution and alimony adjudication. This is particularly true in common, law jurisdictions although our community property regimes still raise serious policy issues.[31] In most U.S. jurisdictions equitable distribution developed as an instrument  for  the  protection  of  women  who  made  possible  the  material  and  spiritual development  of  the  members  of  the  family  unit, usually postponing  indefinitely their  own economic and personal development.

Although there is no consensus about how to measure the value of homemaker services, there are those who would apply traditional economics: either replacement or opportunity cost theory.[32] But marriage involves much more than economic factors.[33]  The personal aspects of it cannot be measured. Money cannot be the only relevant component of value when the task at hand is to distribute wealth accumulated through that very special partnership. Regardless of marketplace economics, our countries must seek both equality and equitability in property distribution upon death or divorce.

In community property jurisdictions, homemaker services are accorded the same value as capital contribution. The trend in common law jurisdiction during the last decades has been to re- cognize the economic value of homemaker’s services, partially approaching the civil law solution. However, full equalization with capital contribution is still resisted in some quarters, as in the judge to whom a clear one third of marital property was a liberal allowance to the wife.[34]

Even though there are some to whom homemaker services command equal valuation with capital contributions,[35]  it is fair to assume that both in civil and in common law jurisdictions women receive less wealth than their husbands in the event of divorce.[36]

D. Mutability of the Chosen Regime

The official grounds for the immutability rule were the protection of creditors, potential heirs, and the State treasury against the possibility of fraud.  But the real reason for the rule is to maintain the power exercised by blood relatives who are interested in retaining control over the transfer of wealth through the bloodline.

The mutability rule adopted in Spain, France and other Civil law countries, should be followed elsewhere.[37] It allows much needed adjustments to new situations, such as de facto separation, and changes in professional, commercial and empresarial activities of the spouses. It may also be said that mutability can function as an escape valve for family crisis.

If we are to promote freedom, marriage should not be an obstacle to it. Married people should be allowed to manage their own persons and their property with adequate flexibility. The rule against immutability of the marriage regime is a serious constraint to its application. The danger of potential fraud against creditors and potential heirs has been exaggerated. Judges, we hope, have the necessary tools at their disposal to deal with this.

The rule in Puerto Rico and in Spain until 1981, which forbids contracts between spouses, has the same foundation as the rule against mutability. For decades, couples under marriage covenants could validly contract among themselves. However, the arguments for potential fraud are equally applicable with or without a covenant. But mutability, in order to assuage the fears of fraud, should be coupled with some form of reliable publicity.[38]

E. Limits to Contractual Theory

As a general rule, clauses binding the spouses in personal, not patrimonial matters should be declared null and void. For example, the rather extensive regulation of the law of domestic relations dealing with custody, maintenance, emancipation, parental authority, guardianship and the like, should be declared beyond the reach of freedom to contract. Covenants, as a general rule, should be limited to the patrimonial aspects of the marriage.

Within that area, spouses should be free to reach agreements between each other and with third parties, whether the transfers of wealth involved are gratuitous or onerous.[39]

Clauses setting limits to the exercise of the right to privacy, and the respect for the dignity the members of the family unit, should also be prohibited, as well as those against the constitutional mandate of equality among the sexes. Those social achievements cannot be subjected to modification, much less to elimination by private agreement.

As a general rule, agreements by which one of the spouses has overtaken the other and gained undue advantage should also be forbidden.

V. Non-Marital Partners

Since the increase of non-marital partners is a fact of life in our societies, a patrimonial regime for the family would be in- complete if no provisions are made for them.[40] In addressing this form of family unit, we must decide on the major policy consideration of whether the full range of marriage rights and privileges should be extended to them, or whether some or all should be denied.[41]

In the Civil Codes with which we are familiar there are no provisions regulating non-marital unions. The 19th century Spanish legislator simply decided to ignore them. It was sub silentio left to the courts of justice the job of designing its legal scheme. Initially, judges, both in Civil and Common law jurisdictions, held that homemaker and other socially acceptable services among concubines were gifts of one to the other, usually of the female to the male.[42] Eventually, presumed donatives intent was replaced by a reasonable expectation of recovery.[43] Notions of fairness, equality and of unjust enrichment led courts to borrow  from  the  marriage  dissolution  provisions  thus  partially  assimilating  concubinage  to marriage.

Most sectors still argue that non-marital unions should not receive all the blessings the legal systems reserve for ceremonial marriages.[44] Where there seems to be, no consensus is as to what specific, consequences of marriage should be extended to concubinage,[45] except with regard to a fair share of the accumulated wealth. But a more controversial issue is presented with gay, lesbian and communal unions. In our view, gay and lesbian couples who, independently of their sexual behavior, accumulate wealth by joining efforts and cash are entitled to equitable distribution. However, the regulation does have to be included in our civil codes.

IV. Closing Statement

Let me conclude my remarks by stating that although we cannot legislate stability marriage, we certainly can and should legislate participatory democracy and distributive justice, not only upon dissolution, but also for an existing union. Of all the patrimonial regimes examined, community property, with recommended adjustments, will go a long way to insure that marriage is truly an equal partnership undertaking. It seems to me that like in no other alternative in community property, spiritual unity corresponds to economic unity. Let us hope that by strengthening equality, liberty, and dignity between spouses, we can somehow moderate the incidence of serious marriage crises in our countries today.

[1] L. Diez Picazo. Picazo. “Del régimen económico patrimonial”, Published in: Comentarios a Las Reformas del Derecho de Familia, Vol. II, Tecnos, Madrid, 1984, p. 1498.