Coverture is a method of equitable property division used by courts in Massachusetts. It is frequently employed to determine the value of non-vested marital property that is subject to division under M.G.L.A. c. 208, § 34. The coverture time period refers to the period of time during which the value of the non-vested property of one spouse is attributable to the marriage. It is typically used by courts and lawyers to determine the value of such non-vested property as pensions and employee stock options. Coverture has its roots in the colonial period of the United States, when married women and their husbands were considered a single entity for most legal purposes and women were not permitted to own or transfer property. Although the law has evolved significantly since the concept of coverture was conceived, the term as it exists today refers only to the fractional method by which courts determine the value of non-vested marital property.
Coverture, as it was applied in the 19th century, was a defense that married women could raise to a number of legal actions against them. Since the common law held that married women could not own or transfer property, those who dared to contract with married women did so at their own peril. In 1865, a plaintiff suing a married woman for the enforcement of promissory notes made by her was defeated after she successfully raised the defense of coverture on appeal. Tracy v. Keith, 93 Mass. 214, (1865). Married women could even raise the defense of coverture against the Commonwealth in a criminal case. Com. v. Feeney, 95 Mass. 560, (1866). In modern times, coverture applies only in family law cases.
Modern family courts apply the legal concept of coverture where one spouse has been earning some type of non-vested property interest throughout the marriage and will likely receive the benefit post-divorce. The most common scenario is when one spouse is a pension holder and has been participating in the pension plan throughout the marriage and continues to participate in the plan after divorce. The non-pension holder spouse is entitled to a portion of the future pension payments in proportion to the amount of time he or she was married to the pension holder. The coverture period is determined by a fraction where the numerator represents the total period of time the pension holder participated in the plan during the marriage, and the denominator is the total period of time the pension holder participated in the plan. Dewan v. Dewan, 17 Mass. App. Ct. 97, 455 N.E.2d 1236, (1983). The determination whether to assign a percentage of present value as a property asset or to allocate benefits if and when received lies largely within the discretion of the judge. Dewan v. Dewan, 17 Mass. App. Ct. 97, 101–02, 455 N.E.2d 1236, 1240 (1983). In Dewan, the wife argued the judge was required to accept the actuary’s testimony as to the value of the pension rights and to allocate a portion of that value presently to the wife by way of equitable division. The court stated that assigning a present value is more desirable in shorter marriages as the pension has little present value due to “long deferred receipt and because the non-retiring spouse’s appropriate share of pension benefits when paid would be confined by the brevity of the marriage” Dewan v. Dewan, 17 Mass. App. Ct. 97, 102, 455 N.E.2d 1236, 1240 (1983). For longer marriages, where the age of retirement is closer, assigning a present value may not be feasible in the absence of other significant assets.
Massachusetts courts have applied a similar time-based method in determining the portion of stock options owned by a spouse that may be included in the marital property. Stock options, like pension plans, are non-vested property rights so the courts apply a fraction method in order to allocate the value of the stock options between spouses. “The number of unvested shares of stock options is multiplied by a fraction whose numerator represents the length of time that the employee owned the options prior to dissolution of the marriage (i.e., the length of time that the employee owned the options prior to and during the marriage), and whose denominator represents the time between the date the options were issued and the date on which they are scheduled to vest. The resulting product is the number of shares subject to division.” Baccanti v. Morton, 434 Mass. 787, 801, 752 N.E.2d 718, 730 (2001). The judge then applies the normal G.L. c. 208, § 34 factors to assign those shares subject to division. In this way, courts have applied the coverture theory to both retirement plans and employee stock options.
The early applications of coverture were based on the idea that women, because of their inherent inferiority, could not own property and thus the husband was required to be the sole provider. While the legal principal of coverture has evolved over the years, the duty of one spouse to provide for the other after separation remains. The extent of that duty regarding non-vested property rights is sometimes determined by the time-based method known as coverture.
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