Ch1 PP8 Facilitating Relationships (Gentry) (2.11.08)

Ch1 PP8 Facilitating Relationships (Gentry) (2.11.08) -...

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Unformatted text preview: CH1. Why We Have Law PP8. Facilitation of Relationships Legal Reading Case: Gentry v. Gentry Court: Kentucky Supreme Court Lesson: One reason we have law is to facilitate relationships Facts Leading to the Case Kathryn and Thomas Gentry were married February 26, 1975 Antenuptial Agreement A few days before their wedding, Tom & Kathy executed an Antenuptial Agreement They did not want their marriage to change: Their property rights as they existed before their marriage Their rights to bequeath their own property as they see fit in their respective wills Tom's net worth was approximately 1.5 million Kathy's net worth was nominal The Gentry's Current Finances The Gentrys' income was derived chiefly from a thoroughbred breeding enterprise that which Tom operated Kathy was not employed outside the home after the marriage Virtually all assets acquired during the marriage were purchased with funds from Tom's business account All income from the enterprise apparently went into Tom's business account, which Tom controlled Kathy received a sum of money each month from that account and was frequently reimbursed for purchases and expenditures At the time of the separation, Tom's net worth had declined during their marriage to between $650,000 and $750,000. Kathy had bank and brokerage accounts worth $42,000. Tom made several significant gifts and transfers of personal property to Kathy during the marriage. He gave her: Kathy's Assets Kathy's name only appears on the bank accounts in her name and a parcel of real estate in California that was purchased in their joint names during the marriage The Divorce The marriage was stormy; they separated several times and then divorced, which led to this lawsuit Trial court held that: TOM AND KATHY VOLUNTARILY ENTERED INTO THE ANTENUPTIAL AGREEMENT THERE HAD BEEN FULL DISCLOSURE OF THEIR RESPECTIVE ASSETS AT THE TIME THE AGREEMENT WAS MADE THEIR INTENT WAS TO INDICATE HOW THEIR PROPERTY SHOULD BE DISTRIBUTED IN THE EVENT OF DEATH OR DIVORCE THE AGREEMENT DID NOT VIOLATE PUBLIC POLICY AND WAS NOT UNCONSCIONABLE (i.e., unscrupulous; beyond reason) Trial court further ruled that: Tom should keep all property in his name, & the California house even though Kathy's name was on the title Kathy should keep property titled in her name, all jewelry that Tom had given her, & the Steinway piano Kathy should receive `spousal maintenance' for 7 years Kathy Appealed Kathy first argued that antenuptial agreements violate public policy because such agreements will lead parties to break their marital vows KY Supreme Court's Analysis Public policy is reexamined in light of changes in society & the law Because of these changes, spouses-to-be have the right to enter into realistic antenuptial agreements to deal with the possibility of a divorce These contracts should be enforced if the marriage dissolves The Gentry agreement does not violate public policy in Kentucky Kathy' s Second Argument Even if the trial cour t was correct in upholding the antenuptial agreement, the cour t should not have awarded the Califor nia house solel y to T om I want my share of the house, Tom! KY Supreme Cour ts Anal ' ysis: Based on the antenuptial agreement... Proper ty in T om's Proper ty in name at the time Kathy's name at of dissolution was the time of T om's dissolution was Kathy's THY KA OM T T om should not have been awarded the Califor nia house as a business asset Even though the house was purchased from T s om' business account, it is not his sole and separate proper ty because at the time of the divorce Kathy had acq uired and owned half of the Califor nia real estate The KY Supreme Cour t therefore remanded (i.e., sent) the case back to the trial cour t with instr uctions to award onehalf ownership in the Califor nia real estate to Kathy , in accordance with the antenuptial agreement and the deed to that proper ty Finall y, should the Antenuptial Agreement be voided because of special circumstances in this case? The KY Supreme Cour t noted that to decide this issue, the trial judge should ask 3 q uestions: (1) Was the agreement obtained through fraud, duress or mistake, or through misrepresentation or nondisclosure of material facts? (2) Is the agreement unconscionable (i.e., unreasonable given the facts of Kathy and T s financial and om' personal situation)? (3) Have the facts and circumstances changed so much since the agreement was executed that its enforcement would be unfair and unreasonable? Issues to Consider Q: What should be the limits of law in attempting to facilitate or inhibit personal relationships? Consider laws addressing gay marriage Issues to Consider Law can also be used to facilitate commercial relationships because it can provide a: (1) Uniform playing field in business (2) Partial antidote for: Self-interest in business, which stimulates rule bending and deceptive practices Business people without competent professional knowledge ...
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This note was uploaded on 04/03/2008 for the course PSYC 277 taught by Professor Staff during the Spring '07 term at Arizona.

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