The Definition
Unjust enrichment is a very broad legal concept that can be important to many different practice areas, not just family law. Simply put, unjust enrichment occurs when one party benefits at the expense of the other. Typically, this occurs by circumstances; it’s not typically as if the beneficiary was dreaming up an illegal scheme to scam the other party. Here’s a good example of unjust enrichment in family law: your father leaves you a beach condo that’s completely paid off, but in total disrepair. Once you get married, your spouse takes a liking to the condo and you two decide to fix it up. Now that you’ve fixed it up, the condo is worth substantially more. While the condo is technically yours in a divorce since you had it before the marriage, it isn’t fair to your soon-to-be-ex that you get to keep the newly renovated condo all to yourself if marital assets were used to upgrade the condo. Therefore, you may have to pay your ex a portion of the increase in the condo’s value.
Were Marital Assets Used?
If you began fixing up an asset while you were married, you almost certainly used marital funds to fix up the asset. The few exceptions to this would be using money that is your separate property, which could be money that you saved before the marriage or received during the marriage by gift or inheritance. Unless there is a premarital agreement otherwise, after a couple gets married, all assets they acquire after the marriage are generally considered to be marital assets. Paychecks, bonuses, contributions to retirement accounts, and all other earnings are also considered to be marital assets. This is true even if you and your spouse have completely separate finances and have never held any form of a joint account. Furthermore, even if your spouse was not employed during the duration of the marriage, it would not mean that they don’t have an interest in the enriched asset. Just because it was technically your earnings alone doesn’t mean that those earnings aren’t marital property.
Co-Mingled Property vs Unjust Enrichment
Property can be co-mingled, but that doesn’t mean that one person was unjustly enriched. Separate property typically becomes co-mingled when marital assets are used to pay for at least some part of the separate asset. If you buy a home before you get married, but you use marital funds to pay for the mortgage each month, your spouse will still have an equitable interest in the home. Of course, your spouse won’t be entitled to the downpayment or the portion that was paid off without marital funds. Your spouse will only be entitled to half of the portion that was covered by marital funds. While the property may not have increased in value at your spouse’s expense (like unjust enrichment) it was still paid off using marital funds (co-mingled).
Premarital Agreements and Unjust Enrichment
Premarital agreements may affect the validity of an unjust enrichment claim. Some premarital agreements may contain language that could potentially bar a person from making a claim of unjust enrichment against their spouse. Such language may not be obvious to the untrained eye. If you are going through divorce, and you believe that you have an interest in your spouse’s separate property, you may need to consult an attorney, especially if you’ve signed a premarital agreement such as a prenuptial agreement.
It May Be a Matter of Opinion
While it may be clear that one party has benefitted at the expense of the other, just how much they’ve benefitted may be a matter of opinion. If your ex fixed up a car during the marriage, they may be trying to claim that the car’s increase in value is lower than it really is—after all, your ex may not want to pay you your fair share. This is why it’s important to have a competent attorney who can help you get the best outcome possible. If your ex is trying to get away without paying you your fair share, you may need to hire experts to help you prove what you’re really owed.
When You’re Filing for Divorce
If you’re filing for divorce, CoilLaw is here for you. If you need help determining how much of an interest you have in your spouse’s separate property, division of marital assets, and more, contact us today to schedule your initial consultation.
