Zelder, Martin --- "The Law and Economics of Marital Property" [2011] ELECD 155; in Ayotte, Kenneth; Smith, E. Henry (eds), "Research Handbook on the Economics of Property Law" (Edward Elgar Publishing, 2011)

Book Title: Research Handbook on the Economics of Property Law

Editor(s): Ayotte, Kenneth; Smith, E. Henry

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847209795

Section: Chapter 11

Section Title: The Law and Economics of Marital Property

Author(s): Zelder, Martin

Number of pages: 16

Extract:

11 The law and economics of marital property
Martin Zelder


1. INTRODUCTION

For the purposes of economic analysis, marital property can be construed in two different
but complementary (and sometimes overlapping) ways: (1) the formal legal sense, and (2)
the functional practical sense. Marital property, as defined formally/legally, refers to prop-
erty acquired during marriage and thereby (typically) subject to division upon divorce.
Marital property can also be defined in a functional/practical sense as assets which
provide consumption flows that can be used to make transactions within both marriage
and divorce. It is worth brief consideration and comparison of these two senses of marital
property, and how they have been affected by developments in law and in economics.
In regard to formal/legal marital property, the law is clearly instrumental in determin-
ing its scope and the extent to which it is transferred between spouses. To be specific, at the
time of divorce, property is classified either as marital (and necessarily subject to division)
or separate (and not necessarily subject to division). Furthermore, the legal system then
sets standards or guidelines as to the appropriate magnitude of post-divorce transfers.
As for functional/practical marital property, it can be construed as assets which yield
consumption flows which can be used for transacting within marriage and divorce. In
recent years, economic analysis of spousal transacting has identified a fundamental issue,
transferability, which critically influences the effect of legal rules governing marriage and
divorce (and changes in them). The implications ...