Oklahoma Basic Marital Property Law

Oklahoma Basic Marital Property Law

Oklahoma courts are required to make an equitable division of property acquired during a marriage. Tigert vs. Tigert, 1979 OK CIV APP 14, ¶6. “An equitable division, however, does not require an equal division.” Id. The Oklahoma trial courts are vested with wide discretion in dividing property, so much so that an abuse of discretion is required to reverse. Further, if the trial court decision can be justified under any theory, whether raised by any party or not, the appellate court will also affirm. Silverstein vs. Silverstein, 1987 OK CIV APP 87, ¶17. Foremost to any property division is the determination of separate versus marital property, then the Oklahoma courts consider a variety of legal precedents and the facts specific to each case for an equitable division. 

Statutes

By statute, Oklahoma law requires in every divorce that the Court confirm in each spouse the property owned by each before marriage and the un-disposed of property earned in his or her own right after marriage. The Court may set apart a portion of a noncustodial parent\’s separate estate to the other for the support of their children. Otherwise, the property remains separate — not subject to division.

The marital property is subject to equitable division between the divorcing parties regardless of how it is titled. The court may award alimony in lieu of property distribution based on its consideration of the property values at the time of divorce. This award may be in the form of a division of the property or a monetary judgment with a payment plan against a party who may be awarded the asset in full.

The Oklahoma statute in effect reads in full as follows:

The court shall enter its decree confirming in each spouse the property owned by him or her before marriage and the undisposed-of property acquired after marriage by him or her in his or her own right. Either spouse may be allowed such alimony out of real and personal property of the other as the court shall think reasonable, having due regard to the value of such property at the time of the divorce. Alimony may be allowed from real or personal property, or both, or in the form of money judgment, payable either in gross or in installments, as the court may deem just and equitable. As to such property, whether real or personal, which has been acquired by the parties jointly during their marriage, whether the title thereto be in either or both of said parties, the court shall, subject to a valid ante-nuptial contract in writing, make such division between the parties as may appear just and reasonable, by a division of the property in kind, or by setting the same apart to one of the parties, and requiring the other thereof to be paid such sum as may be just and proper to effect a fair and just division thereof. The court may set apart a portion of the separate estate of a spouse to the other spouse for the support of the children of the marriage where custody resides with that spouse.

43 O.S. § 121(B). Absent fraud, a divorce acts as an absolute bar to any claims to property of the other. 43 O.S. § 122. If there is a contract at issue, then contract law principles and defenses govern. Otherwise, Oklahoma property division is simply legislated to settle all property claims spouses may have against each other. Oklahoma\’s statutory law mandates a fair and equitable division of marital property. Larman v. Larman, 1999 OK 83, ¶17, citing 43 O.S. § 121(B). Because Oklahoma courts require that liabilities be divided as well, it is technically the net marital estate subject to equitable division. Just and reasonable division of the net marital estate can allow property divisions of great simplicity or complexity.

Case Law

The courts define marital property as that which is accumulated by the joint efforts of spouses during their marriage. The increased or enhanced value of a spouse\’s separate property which is produced by the efforts, skills or funds of either spouse is treated as a divisible spousal asset. See Larman supra, citing Thielenhaus v. Thielenhaus, 1995 OK 5, 890 P.2d 925, 930-931. Otherwise, separate property is not a divisible asset in a divorce, and is only a consideration if there are children of the marriage or there is a dispute as to its classification as separate property.

Under the \”partnership theory of marriage,\” spouses obtain property through their joint efforts. Taylor v. Taylor, 1992 OK CIV APP 22, ¶8. As such, it is a divisible marital asset. However, property or funds that were not received through the joint efforts of the parties are subject to debate as to whether they should be included in the marital estate.

For primary example, inherited property is not acquired through the joint industry of spouses. Therefore, it is separate property. However, inherited property may be subject to property division when its value is enhanced through the “joint efforts, skill or funds of both spouses.” Templeton v. Templeton, 1982 OK 127, 656 P.2d 250, ¶5. “In order for a spouse to successfully prove that enhanced value is the result of joint endeavors, it must be shown that the net worth of the property increased during the marriage as the direct result of substantial contribution by the spouse of effort, skill or funds.” Id. See also generally Thielenhaus v. Thielenhaus, 1995 OK 5, ¶9.

Also, non-economic portions of tort recoveries are separate property. In Taylor, the Court found that tort recoveries, similar to inherited property, occur due to \”fortuitous circumstances entirely distinct from the efforts or economic undertakings of the marital partners\” and that non-economic portions of such awards should be determined to be separate property. Id. This means that recovery of funds for lost wages or medical expenses may be part of the marital estate, whereas as those for pain and suffering are not, just as are inherited properties not part of the marital estate.

Gifts, like inheritances, are not usually included in the marital estate either, especially if they are not co-mingled. Oklahoma Courts have considered gifts to specific spouses and determined: “The original ownership regime must be respected unless there is proof of an inter-spousal gift.” Larman at ¶8. “In short, gifts require an immediately effective, unqualified and gratuitous transfer of ownership to the donee.” Larman at fn 7. Spouses may convey property to the other as a gift though jointly acquired, or they may make such transfer with the property retaining its marital or separate property classification. Bartlett at ¶11. Gifts given by one spouse to the other are the separate property of the donee.

A spouse may acquire an interest in separate property of the other spouse when joint efforts and improvements are undertaken which increase the value of the property. A Court would consider the acquisition cost and cost of improvements. Then, appreciation unrelated to the efforts of spouses, like inflation or the market forces. And finally, the Court would consider the increase in value attributable to the personal efforts of the spouses. May v. May, 1979 OK 82, ¶9. Unless the joint industry of the parties enhanced the value of property after the date of separation or it was used and managed by both after that date, then the Court will view property acquired after that date as separate.  Ford vs. Ford, 1992 OK CIV APP 123, ¶12-¶13.

A final important note about property deeds — A gift to a spouse (or to the property of the marital estate) is presumed when spouses own property in joint tenancy. Bartlett vs. Bartlett, 2006 OK CIV APP 112, ¶7. The party seeking to rebut that presumption must present by clear and convincing evidence a purpose for placing the property in joint tenancy which is collateral to intending a gift. Larman at ¶9. Mere self- serving testimony that no gift was intended will not suffice. Bartlett at ¶8. A transfer to obtain financing is a purpose collateral to intending a gift. Bartlett at ¶16, citing Larman. However, a gift transfer for estate planning and avoiding taxes is not collateral to intending a gift, but rather proof of the gift as that is what the taxing authorities require. Bartlett at ¶20. There is a great amount of law as to gifts in Oklahoma that should be carefully reviewed.

In order to determine a \’just and reasonable\’ division of the marital estate, Oklahoma Courts consider the contributions of both spouses, and on occasion their needs. Only that conduct which had the effect of creating, maintaining or enhancing marital property, or conduct which had the effect of reducing it in value are relevant factors in a property division analysis. Moyers v. Moyers, 1962 OK 146, ¶9.

If it should develop in the trial of the cause that the accumulations have been due to [the wife\’s] economy, industry, frugality, and sturdy virtues, which have been a stay to the home and constant guard of the accumulations, and at the same time it should develop that the husband has not been frugal, has not been industrious, has not been sagacious, but, on the contrary, has spent much of his money in riotous living, in gambling, drinking, or associations truant to his marriage vows, it would not be equitable to the wife, under these circumstances, that the husband should be given half of their property.

Id. At ¶9. In other words, one spouse may receive more of the marital share of property if the facts and circumstances so favor.

The Supreme Court stated that personal conduct is only relevant as to evidence of endeavors which contributed to the creation of the marital estate. Oklahoma Courts consider the contributions of each spouse to the marital estate. Obvious considerations include the financial contributions and business expertise or management of the marital estate. As far as a non income producing spouse, it is enough that the spouse raise  children and establish a good home. Evidence as to the virtue and industry of a spouse also entitles them to a substantial share of an estate. Wood v. Wood, 1990 OK CIV APP 49, ¶12. See also Durfee v. Durfee, 1969 OK 195, ¶12.

The Supreme Court stated need is not a factor in property division. Bouma vs. Bouma, 1968 OK 35, ¶8.  However, in Standefer v. Standefer, 2001 OK 37, the husband was severely and totally disabled in an accident. The Court approved a two-thirds division of the marital property in favor of the husband because of his disability. Clearly, the “need” of the husband justified the unequal division of the marital asset.

Sometimes a division of property may be inequitable when the specific facts and circumstances support it. For example, when a husband transferred substantial assets to his children before the divorce action, the case was remanded to determine if the transfers were fraudulent. Sanditen v. Sanditen, 1972 OK 39, ¶8, 496 P.2d 365. In this case, the husband had transferred substantial assets to his children shortly before the divorce action. The case was remanded to the trial court to determine if the husband\’s transfers were fraudulent to equitably allocate the marital estate considering such factor.

The trial court must make findings about the value of marital assets. See Gideon v. Gideon, 1953 OK 341, 263 P.2d 740. Bouma v. Bouma, 1968 OK 35, 439 P.2d 198. And finally, a property distribution could negatively affect a party\’s claim for support alimony. When a Court grants a spouse a substantial amount of property, “an alimony claim must be supported by proof of excess monetary needs to cushion the economic impact of transition and readjustment to gainful employment.\” Johnson v. Johnson, 674 P.2d 539, 546 (Okl. 1983). In other words, a substantial amount of property set over to a spouse could negate an award of support alimony as unnecessary. This is an especially important consideration for which proof must be elicited at trial in order to prevail for a support alimony award.

Unusual Assets

Social security benefits are separate property not subject to distribution. Umber vs. Umber, 1979 OK 24, § 9. “A lump-sum payment from the Social Security Administration for accumulated disability benefits is not marital property subject to equitable division.” Crocker vs. Crocker, 1991 OK 130, ¶1.

Professional degrees and licenses, together with estimated future earnings, are not subject to valuation and division. Silverstein vs. Silverstein, 1987 OK CIV APP 87, ¶12-¶13. In other words, Oklahoma does not recognize an educational degree as property subject to division in a marital dissolution proceeding. Forristal v. Forristall, 1992 OK CIV APP 64, ¶7. However, “restitutionary alimony” may be allowed for compensation when a spouse provides twice as much support for the other to attend school and co-signs on school loans when they divorce before a return on that investment. Forristall at ¶8.

Personal injury awards must be analyzed to determine which portions are separate property and which are marital property subject to division. The general rule is that pre-divorce non-economic loss and post-divorce non-economic loss are the separate property of the claimant spouse. Taylor v. Taylor, 1992 OK CIV APP 22, ¶7. Because damages for emotional distress and pain and suffering are not acquired through the joint efforts of the spouses they are usually separate property. Id. at ¶8. Similarly, worker\’s compensation awards are only marital property to the extent they reimburse lost income during the marriage. Crocker vs. Crocker, 1991 OK 130, ¶1.

For the most up-to-date and comprehensive law on any subject discussed herein, you should consult with an Oklahoma attorney about your specific facts and needs, as well as any changes in law that may occur.