Oklahoma Divorce: Dividing Property

When we think of hot-button issues in a divorce, the usual suspects are alimony or child custody. But dividing a couple's property can also be a big source of conflict, especially when it comes to things like determining who gets the marital home or even the family pet. If you're facing or in the midst of a divorce, it's important for you to understand how Oklahoma's divorce law addresses the division of property and allocation of debts.

Is Oklahoma a Community Property State?

No, Oklahoma isn't a "community property" state. Rather, it's guided by the principle of "equitable distribution."

In community property states, judges generally divide a couple's property equally (although some states have a few exceptions). With equitable distribution, judges divide a couple's property and allocate their debts based on what's fair under the circumstances of each case—which doesn't necessarily mean a 50-50 split.

Characterizing Marital and Separate Property in Oklahoma

The first step in approaching property division is to determine which assets (and debts) will be included. That boils down to figuring out which assets are "marital" property and which are "separate" property.

What's Considered Marital Property in Oklahoma?

Under Oklahoma law, "marital property" means all property (including real estate, personal property, and other assets) the spouses jointly acquired during the marriage, even if title to the property is only in one spouse's name. Judges will presume that any property acquired during the marriage is due to the spouses' joint efforts, unless one of them can prove otherwise. (Okla. Stat. tit. 43, § 121(B) (2023); Manhart v. Manhart, 725 P.2d 1234 (Okla. 1986).)

The phrase "during the marriage" doesn't necessarily mean up to the date of divorce. Rather, Oklahoma judges generally use the date when the couple permanently separated as the cut-off date for when property they acquire will no longer be considered marital. (Janitz v. Janitz, 315 P.3d 410 (Okla. Ct. App. 2013).) The reasoning behind this is that if a couple is no longer living together, the concept of "joint efforts" isn't really viable any more. That's why property acquired after separation might still be considered marital if it was acquired with joint funds, both spouses used or managed the property, or it's clear that they meant the property to be marital.

Also, Oklahoma courts have long recognized two significant exceptions to the general rule on marital property:

• an inheritance that one spouse receives, and
• a gift that one spouse receives individually (including gifts between spouses).

In those cases, the gift or inheritance is the recipient's separate property, no matter when it was received.

What's Considered Separate Property in Oklahoma?

Besides gifts and inheritances, other examples of separate property include:

• property that a spouse owned before the marriage and continued to maintain as separate property afterwards
• the increase in value of a spouse's separate property, unless it resulted from both spouses' efforts or funds—such as when they used marital funds to make mortgage payments or improvements on a house that one spouse owned before the marriage
• income derived from separate property (such as rent, interest, or dividends)
• property that a spouse bought during the marriage with separate funds (unless the property was put in both spouses' names in joint tenancy), and
• compensation received by one spouse for a personal injury.

(Thielenhaus v. Thielenhaus, 890 P.2d 925 (Okla. 1995), In re Marriage of Marzuola and Click, 253 P.3d 1004 (Okla. Ct. App. 2011); Smith v. Villareal, 298 P.3d 533 (Okla. 2012).)

Although separate property isn't subject to distribution in the divorce, be aware that a judge may award some of a noncustodial spouse's separate property to the custodial spouse for support of the children. (Okla. Stat. tit. 43, § 121(B) (2023).)

Can Separate Property Become Marital Property in Oklahoma?

Separate property can be converted ("transmuted") to marital property in Oklahoma in one of two ways:

• intentionally, as when the spouse who owns a separate asset changes the title to include the other spouse (unless the owner spouse can prove there was another reason to do that, such as when it was required to refinance the property), or
• unintentionally, as when a spouse mixes ("commingles") separate assets with marital assets without understanding the consequences.

Sometimes, it's fairly clear when separate and marital property has been commingled—for example, when a spouse deposits money from a separate IRA into the couple's joint bank account, which is then used to pay the couple's living expenses. (Gillett v. McKinney, 440 P.3d 69 (Okla. Ct.Ap. 2019).) But other times it can be a complicated issue that will require the help of a knowledgeable family law attorney.

How Is Property Valued in an Oklahoma Divorce?

When you have any financial issues at stake (including property division) in your Oklahoma divorce, you and your spouse must exchange (and submit to the court) complete information about your income, expenses, assets, and debts. That's why it pays to prepare your financial information before you file for divorce.

In many cases, determining an asset's value is fairly straightforward, such as obtaining the balances on bank accounts. With certain types of property (like a house, family business, or some retirement plans), you'll probably need help from financial experts like appraisers, forensic accountants, or actuaries.

If you and your spouse can't agree on the value of any particular asset, even after getting expert help, the judge may have to decide for you, based on the evidence you both provide.

Unlike most other states, Oklahoma doesn't provide a set date for when a couple's property and debts should be valued. Rather, the law gives judges the latitude to determine valuation dates that they believe are "just and reasonable" in each case. (Sien v. Sien, 889 P.2d 1268 (Okla. Ct. App. 1994).)

Can You Agree on How to Divide Your Property?

You and your spouse always have the option of agreeing on how you'll split up your property when you get divorced, rather than having a judge decide for you. In fact, the courts strongly encourage divorcing couples to settle all their marital issues before a trial is necessary, and they provide the opportunity to do that during the divorce process. You'll need to submit the agreement to the court for approval, but judges will almost always approve these agreements as long as they appear to be fair.

Also, if you and your spouse reach a complete marital settlement agreement before you file your divorce papers—covering all the legal issues involved in ending your marriage—you'll be able to file for an uncontested divorce in Oklahoma. Uncontested divorces are much cheaper, quicker, and easier than traditional contested divorces. Many couples are able to navigate the uncontested divorce process without hiring a lawyer, either entirely DIY or by using an inexpensive online divorce service to streamline the process.

You can also agree before you get married (by signing a prenuptial agreement) on how you'll divide your property if you later decide to divorce.

How Do Oklahoma Judges Decide What's Fair When Dividing Property?

There's no exact formula that Oklahoma judges follow when they're deciding on a fair division of marital property in divorce. Courts in the state have come up with some guidelines for judges, such as focusing on determining the extent of each spouse's "rights in the property and their efforts as contributing factors to the acquisition of the property in question." (Wilhelm v. Wilhelm, 678 P.2d 727 (Okla. Civ. App. 1983).)

That's a very broad standard. And unlike many other states, Oklahoma law doesn't provide anything more specific, such as factors that judges should consider when deciding how to divide a couple's property equitably. As a practical matter, however, judges will probably look at circumstances such as:

• each spouse's ability to work
• either spouse's disabilities
• which parent will have primary custody of the children
• the amount of alimony paid from one spouse to another
• the spouses' debts, and
• any conduct that increased or decreased the value of marital property.

Who Gets the Family Home in an Oklahoma Divorce?

Oklahoma law doesn't specify who should get to keep the family home after divorce. As such, the house is just another asset subject to equitable distribution.

If you and your spouse can't agree on what to do with your house, the judge will make a decision based on the specific circumstances in your case. If the house goes to one spouse, the judge will typically award different assets—such as retirement accounts—to the other spouse to arrive at a fair distribution of all the couple's property.

Of course, many couples don't own enough other assets to balance out the value of a house awarded to one spouse. So the judge may simply order them to sell the house and divide the proceeds. If you don't want a forced sale, you'd be wise to work out an agreement with your spouse after exploring the other options for dealing with the family home.

What About Dividing 401(k) and Other Retirement Accounts?

Retirement plans are also part of property division in divorce. Valuing these assets can be very complex, especially defined-benefit plans or 401(k) plans that a spouse began participating in before the marriage. This is why you almost invariably need the services of an actuary or an attorney trained in calculating the portion of the plan that's subject to distribution in the divorce.

And when you're dividing employment-related retirement plans like a 401(k) or a pension, you'll need an expert to prepare a special order (known as a qualified domestic relations order, or "QDRO") for the plan administrator.

When splitting military benefits, the judge must follow specific guidelines. If a spouse earns Special Monthly Compensation (SMC) for the loss or lost use of an organ or extremity, the judge will treat those payments as the injured spouse's separate property. (Okla. Stat. tit. 43, § 121(C) (2023).) Additionally, Combat-Related Special Compensation (CRSC) is the separate property of an injured spouse who can prove that the payment is for combat-related loss of a limb or bodily function, and the payments began before either spouse filed for divorce. (Okla. Stat. tit. 43, § 121(D) (2023).)

When dividing disposable retired or retainer military pay, the judge must determine whether the pay belongs to the earning spouse or if it's marital property. (Okla. Stat. tit. 43, § 121(E) (2023).)

Who Gets the Family Pet in a Divorce?

Even though pets often seem like members of the family, the law considers all animals to be property. As such, they're divided in divorce just like a television or automobile. Unlike a few other states, Oklahoma law doesn't specifically allow judges to take into account the animal's well-being or to award joint custody of a pet. Still, when empathetic judges are deciding who gets the pet in the divorce, they will often consider the impact of their decision on members of the family, especially the children.

Getting Help With Your Divorce and Property Division

If you're having trouble agreeing with your spouse about how to divide your property, you can try mediation. The cost of divorce mediation varies, but you and your spouse can split the mediator's fee. And a successful mediation will be considerably less expensive than going to trial (with attorneys' fees for both of you).

But if you still aren't able to reach a settlement agreement, even with a mediator's help, you should at least speak with a lawyer. An experienced family law attorney can evaluate your case and lay out your options going forward. Having a lawyer on your side is especially critical if you're experiencing domestic violence in your marriage or if you suspect that your spouse is hiding assets.

You should know that the question of whether you need a divorce lawyer isn't always an all-or-nothing choice. Sometimes, you can hire an attorney on an as-needed or consulting basis to handle certain tasks in your divorce, such as drafting or reviewing your settlement agreement, to make sure you haven't missed anything important or inadvertently given up important rights.