Another method suggested in the literature for dissolving the marital economic partnership was the Premarital Security Agreement (PSAs) (Ertman, 1998). PSAs allocated an award of 30% of the income differential (gross or net was not specified) between spouses’ incomes for a duration of half the length of the marriage, plus the difference between 18 and the age of the youngest minor child.
PSAs took into account the market laborer’s gains and the losses incurred by the domestic laborer by considering the investment made by the domestic laborer as a loan provided to the market laborer, which allowed the market laborer to realize his/her full income earning potential. Upon divorce, an amount was paid to the domestic laborer from the market laborer, in order to pay off the secured debt established prior to marriage and acquired through the receipt of child care and homemaking goods and services.
PSAs are based on a partnership model and have a compensatory assumption that entitled the person who does the majority of the domestic work to a financial award. Those who support the clean break models would disagree with the PSA’s formula, which continues post-divorce economic ties. The American Law Institute’s Proposal The most recent proposal to reform the distribution of post-divorce income was developed by the American Law Institute (ALI). The project on family dissolution was launched in 1995 and produced a published report in May 2002.
The proposal was a post-divorce pay scheme that eliminated alimony and references to fault and need, and replaced them with “compensatory payments. ” The primary purpose of the ALI principles was to reconceptualize spousal maintenance from relief of need to compensation for loss (American Law Institute, 2002). ALFs principles were designed to achieve an equitable sharing of post-divorce losses in a manner that was predictable and consistent (Shehan et al. , 2008).
In order to achieve predictability and consistency, the principles suggested that states should adopt a ‘rule of statewide application,’ which would be utilized by calculating spouses’ income disparity (neither gross nor net income was specified), and multiplying it by a ‘durational factor’ based on the length of the caretaking period or marriage (Starnes, 2001). ALFs proposal did not provide the appropriate percentage in order to use the current formula (Garrison, 2001), and thus only provided a framework for reform and left the specifics to later State action and applications (Starnes, 2001).
The ALI principles specify five kinds of compensable losses according to Thompson (2001): In a marriage of significant duration, the loss in living standard experienced at dissolution by the spouse who has less wealth or earning capacity; (b) an earning capacity loss incurred during marriage but continuing after dissolution and arising from one spouse’s disproportionate share, during marriage, of the care of the marital children or of the children of either spouse; (c) same as (b) only ‘arising from the care provided by one spouse to a sick, elderly, or disabled third party, in fulfillment of a moral obligation of the other spouses or of both spouses jointly; (d) the loss either spouse incurs when the marriage is dissolved before that spouse realizes a fair return from his or her investment in the other spouse’s earning capacity; and (e) an unfairly disproportionate disparity between the spouses in their respective abilities to recover their pre-marital living standard after the dissolution of a short marriage, (p. 12)